##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549


FORM 10-Q

|      |  |                                                                                          |  | 
|----- |  | ---------------------------------------------------------------------------------------- |  | 
|[X]   |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934  |  | 
|      |  |                                                                                          |  | 
|      |  | For the quarterly period ended September 30, 2002                                        |  | 
|      |  |                                                                                          |  | 
|      |  | OR                                                                                       |  | 
|      |  |                                                                                          |  | 
|     
|     
|     
|     
|[   ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |  | 

Commission File No. 0-30673

NTL INCORPORATED

---

(Exact name of registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 13-4105887                          
|                                                               |  |                                     
|(State or other jurisdiction of incorporation
or organization) |  | (I.R.S. Employer Identification No.)
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |  |                                     
|                                                              
|                                                              
|                                                              
|                                                              
|110 East 59th Street, New York, New York                       |  | 10022                               
|                                                               |  |                                     
|(Address of principal executive offices)                       |  | (Zip Code)                          

(212) 906-8440

---

(Registrants telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes [X]          No [   ]

The number of shares outstanding of the issuers common stock as of September
30, 2002 was 276,626,476.





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TABLE OF CONTENTS



|                              |                                                                                               |                                                                |  |  |  |  |  | 
|----------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------------- |  |  |  |  |  | 
|PART I. FINANCIAL INFORMATION
|                              | ITEM 1. FINANCIAL STATEMENTS                                                                 
|                              |                                                                                               | Condensed Consolidated Balance Sheets                         
|                              |                                                                                               | Condensed Consolidated Statements of Operations               
|                              |                                                                                               | Condensed Consolidated Statement of Shareholders (Deficiency)
|                              |                                                                                               | Condensed Consolidated Statements of Cash Flows               
|                              |                                                                                               | Notes to Condensed Consolidated Financial Statements          
|                              | ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                              | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                           
|                              | ITEM 4. CONTROLS AND PROCEDURES                                                              
|                              |                                                                                               | Risk Factors                                                  
|PART II. OTHER INFORMATION   
|                              | Item 1. Legal Proceedings                                                                    
|                              | Item 2. Changes in Securities and Use of Proceeds                                            
|                              | Item 3. Defaults upon Senior Securities                                                      
|                              | ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K                                                     
|SIGNATURES                   
|CERTIFICATION                



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##### Table of Contents



NTL Incorporated (Debtor-in Possession) and Subsidiaries

Index

|                              |  |                                                                                       |    |                                                                                                          |    |      |   | 
|----------------------------- |  | ------------------------------------------------------------------------------------- | -- | -------------------------------------------------------------------------------------------------------- | -- | ---- | - | 
|                              |  |                                                                                       |    |                                                                                                          |    | Page
|                              |  |                                                                                       |    |                                                                                                          |    |     
|PART I. FINANCIAL INFORMATION |  |                                                                                       |    |                                                                                                         
|                             
|                             
|                             
|                             
|Item 1.                       |  | Financial Statements                                                                  |    |                                                                                                          |    |     
|                             
|                             
|                             
|                             
|                              |  |                                                                                       |    | Condensed Consolidated Balance Sheets-
September 30, 2002 and December 31, 2001                          |    |      | 2 | 
|                             
|                             
|                             
|                             
|                              |  |                                                                                       |    | Condensed Consolidated Statements of Operations-
Three and nine months ended September 30, 2002 and 2001 |    |      | 4 | 
|                             
|                             
|                             
|                             
|                              |  |                                                                                       |    | Condensed Consolidated Statement of Shareholders (Deficiency)-
Nine Months ended September 30, 2002     |    |      | 5 | 
|                             
|                             
|                             
|                             
|                              |  |                                                                                       |    | Condensed Consolidated Statements of Cash Flows-
Nine months ended September 30, 2002 and 2001           |    |      | 7 | 
|                             
|                             
|                             
|                             
|                              |  |                                                                                       |    | Notes to Condensed Consolidated Financial Statements                                                     |    |      | 8 | 
|                             
|                             
|                             
|                             
|Item 2.                       |  | Managements Discussion and Analysis of Results of
Operations and Financial Condition |    |                                                                                                          | 36 |     
|                             
|                             
|                             
|                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                            |    |                                                                                                          | 63 |     
|                             
|                             
|                             
|                             
|Item 4.                       |  | Controls and Procedures                                                               |    |                                                                                                          | 65 |     
|                             
|                             
|                             
|                             
|Risk Factors                  |  |                                                                                       | 65 |                                                                                                         
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION    |  |                                                                                       |    |                                                                                                         
|                             
|                             
|                             
|                             
|Item
1.                       |  | Legal Proceedings                                                                     |    |                                                                                                          | 75 |     
|                             
|                             
|                             
|                             
|Item
2.                       |  | Changes in Securities and Use of Proceeds                                             |    |                                                                                                          | 75 |     
|                             
|                             
|                             
|                             
|Item 3.                       |  | Defaults Upon Senior Securities                                                       |    |                                                                                                          | 75 |     
|                             
|                             
|                             
|                             
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                      |    |                                                                                                          | 79 |     
|                             
|                             
|                             
|                             
|SIGNATURES                    |  |                                                                                       | 80 |                                                                                                         



IN REVIEWING THIS DOCUMENT, YOU
ARE CAUTIONED TO READ THE SECTION ENTITLED
RISK FACTORS WHICH FORMS AN IMPORTANT PART OF THIS REPORT.





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##### Table of Contents






PART I. FINANCIAL INFORMATION




ITEM 1. FINANCIAL STATEMENTS




NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Balance Sheets
(in millions)

|                                                                               |                                                                                                 |   |               |          |              |   |          |          | 
|------------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------- | - | ------------- | -------- | ------------ | - | -------- | -------- | 
|                                                                               |                                                                                                 |   | September 30, |          | December 31,
|                                                                               |                                                                                                 |   | 2002          |          | 2001        
|                                                                               |                                                                                                 |   |               |          |             
|                                                                               |                                                                                                 |   | (unaudited)   |          | (see note)  
|Assets                                                                         |                                                                                                 |   |               |          |              |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Current assets:                                                                |                                                                                                 |   |               |          |              |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Cash and cash equivalents, including $183.6 of
restricted cash (2002)                           |   | $             | 319.5    |              |   | $        | 230.7    | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Marketable securities  restricted                                                              |   |               | 11.0     |              |   |          |         | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Accounts receivable-trade, less allowance for doubtful
accounts of $13.1 (2002) and $7.7 (2001) |   |               | 50.8     |              |   |          | 197.4    | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Other                                                                                           |   |               | 75.0     |              |   |          | 94.4     | 
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Discontinued operations                                                                         |   |               | 13,519.9 |              |   |          | 13,275.1 | 
|                                                                               |                                                                                                 |   |               |          |              |   |          |         
|Total current assets                                                           |                                                                                                 |   | 13,976.2      |          |              |   | 13,797.6 |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Fixed assets, net                                                              |                                                                                                 |   | 1,613.3       |          |              |   | 1,497.8  |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Intangible assets, net                                                         |                                                                                                 |   | 1,157.7       |          |              |   | 1,082.5  |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Investments in and loans to affiliates, net                                    |                                                                                                 |   | 75.7          |          |              |   | 267.8    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other assets, net of accumulated amortization of
$45.9 (2002) and $24.9 (2001) |                                                                                                 |   | 153.9         |          |              |   | 192.8    |         
|                                                                               |                                                                                                 |   |               |          |              |   |          |         
|Total assets                                                                   |                                                                                                 | $ | 16,976.8      |          |              | $ | 16,838.5 |         
|                                                                               |                                                                                                 |   |               |          |              |   |          |         

2



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Balance Sheets-continued
(in millions)

|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |              |   |          |           |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------- | - | ------------- | --------- | ------------ | - | -------- | --------- | -
|                                                                                                                                                                                                                         |                                                                                                                                                         |   | September 30, |           | December 31,
|                                                                                                                                                                                                                         |                                                                                                                                                         |   | 2002          |           | 2001        
|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |             
|                                                                                                                                                                                                                         |                                                                                                                                                         |   | (unaudited)   |           | (see note)  
|Liabilities and shareholders (deficiency)                                                                                                                                                                               |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Liabilities not subject to compromise                                                                                                                                                                                    |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Current liabilities:                                                                                                                                                                                                     |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Accounts payable                                                                                                                                        |   | $             | 42.8      |              |   | $        | 40.5      |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Accrued expenses and other                                                                                                                              |   |               | 103.0     |              |   |          | 166.9     |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Interest payable                                                                                                                                        |   |               | 38.2      |              |   |          | 50.5      |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Deferred revenue                                                                                                                                        |   |               | 85.6      |              |   |          | 191.4     |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Current portion of long-term debt                                                                                                                       |   |               | 2,550.1   |              |   |          | 3,460.2   |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Discontinued operations                                                                                                                                 |   |               | 17,571.7  |              |   |          | 16,393.0  |  
|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |              |   |          |          
|Total current liabilities                                                                                                                                                                                                |                                                                                                                                                         |   | 20,391.4      |           |              |   | 20,302.5 |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Long-term debt                                                                                                                                                                                                           |                                                                                                                                                         |   |              |           |              |   |         |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Other                                                                                                                                                                                                                    |                                                                                                                                                         |   | 93.2          |           |              |   | 159.2    |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Commitments and contingent liabilities                                                                                                                                                                                   |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Deferred income taxes                                                                                                                                                                                                    |                                                                                                                                                         |   | 120.4         |           |              |   | 145.5    |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Redeemable preferred stock-$.01 par value, plus
accreted dividends; liquidation preference $2,967.5; less
unamortized discount of $35.0 (2002) and $53.4 (2001);
issued and outstanding 2.1 (2002) and 2.1 (2001) shares |                                                                                                                                                         |   |              |           |              |   | 2,773.7  |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Liabilities subject to compromise, including redeemable preferred
stock                                                                                                                                                  |                                                                                                                                                         |   | 4,296.9       |           |              |   |         |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|Shareholders (deficiency):                                                                                                                                                                                              |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Series preferred stock-$.01 par value; authorized
10.0 shares; liquidation preference $3,101.8; issued
and outstanding 3.0 (2002) and 3.0 (2001) shares |   |               |          |              |   |          |          |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Common stock-$.01 par value; authorized 800.0 shares;
issued and outstanding 276.6 (2002) and 276.6 (2001) shares                                       |   |               | 2.8       |              |   |          | 2.8       |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Additional paid-in capital                                                                                                                              |   |               | 13,576.6  |              |   |          | 13,720.0  |  
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                        
|                                                                                                                                                                                                                         | Accumulated other comprehensive (loss)                                                                                                                  |   |               | (701.3    | )            |   |          | (1,072.8  | )
|                                                                                                                                                                                                                         | (Deficit)                                                                                                                                               |   |               | (20,803.2 | )            |   |          | (19,192.4 | )
|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |              |   |          |          
|                                                                                                                                                                                                                         |                                                                                                                                                         |   | (7,925.1      | )         |              |   | (6,542.4 | )        
|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |              |   |          |          
|Total liabilities and shareholders (deficiency)                                                                                                                                                                         |                                                                                                                                                         | $ | 16,976.8      |           |              | $ | 16,838.5 |          
|                                                                                                                                                                                                                         |                                                                                                                                                         |   |               |           |              |   |          |          

Note: The balance sheet at December 31, 2001 has been derived from the audited
financial statements at that date.

See accompanying notes.

3



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##### Table of Contents






NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(in millions, except per share data)

|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------- | - | ------------------ | ------ | ----------------- | - | -------- | ------ | ---- | - | -------- | -------- | - | - | -------- | -------- | -
|                                                                               |                                                                                             |   | Three Months Ended |        | Nine Months Ended
|                                                                               |                                                                                             |   | September 30,      |        | September 30,    
|                                                                               |                                                                                             |   |                    |        |                  
|                                                                               |                                                                                             |   | 2002               |        | 2001              |   | 2002     |        | 2001
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |     
|Revenues                                                                       |                                                                                             | $ | 127.2              |        |                   | $ | 106.4    |        |      | $ | 348.3    |          |   | $ | 313.1    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Costs and expenses                                                             |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Operating expenses (exclusive of depreciation shown separately below)          |                                                                                             |   | 66.2               |        |                   |   | 45.7     |        |      |   | 170.6    |          |   |   | 126.6    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Selling, general and administrative expenses                                   |                                                                                             |   | 35.5               |        |                   |   | 44.0     |        |      |   | 120.6    |          |   |   | 134.5    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other charges                                                                  |                                                                                             |   | 16.3               |        |                   |   | 3.3      |        |      |   | 31.9     |          |   |   | 3.3      |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Corporate expenses                                                             |                                                                                             |   | 3.2                |        |                   |   | 11.4     |        |      |   | 14.4     |          |   |   | 33.1     |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Depreciation                                                                   |                                                                                             |   | 53.6               |        |                   |   | 45.0     |        |      |   | 148.9    |          |   |   | 121.5    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Amortization                                                                   |                                                                                             |   | 32.8               |        |                   |   | 97.7     |        |      |   | 69.5     |          |   |   | 298.4    |         
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                               |                                                                                             |   | 207.6              |        |                   |   | 247.1    |        |      |   | 555.9    |          |   |   | 717.4    |         
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|Operating (loss)                                                               |                                                                                             |   | (80.4              | )      |                   |   | (140.7   | )      |      |   | (207.6   | )        |   |   | (404.3   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other income (expense)                                                         |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest income and other, net                                                 |                                                                                             |   | 2.0                |        |                   |   | 11.9     |        |      |   | 17.5     |          |   |   | 9.8      |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest expense (contractual interest of $167.3 (2002))                       |                                                                                             |   | (36.3              | )      |                   |   | (51.1    | )      |      |   | (133.2   | )        |   |   | (143.3   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Share of (losses) from equity investments                                      |                                                                                             |   | (81.4              | )      |                   |   | (48.2    | )      |      |   | (168.1   | )        |   |   | (141.8   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Foreign currency transaction gains (losses)                                    |                                                                                             |   | 1.6                |        |                   |   | (5.9     | )      |      |   | 6.8      |          |   |   | (15.4    | )       
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|(Loss) before recapitalization items, income taxes and
discontinued operations |                                                                                             |   | (194.5             | )      |                   |   | (234.0   | )      |      |   | (484.6   | )        |   |   | (695.0   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Recapitalization items, net                                                    |                                                                                             |   | 10.1               |        |                   |   |         |        |      |   | (11.6    | )        |   |   |         |         
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|(Loss) before income taxes and discontinued operations                         |                                                                                             |   | (184.4             | )      |                   |   | (234.0   | )      |      |   | (496.2   | )        |   |   | (695.0   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income tax benefit                                                             |                                                                                             |   | 14.7               |        |                   |   | 12.7     |        |      |   | 40.1     |          |   |   | 38.6     |         
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|(Loss) from continuing operations                                              |                                                                                             |   | (169.7             | )      |                   |   | (221.3   | )      |      |   | (456.1   | )        |   |   | (656.4   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Discontinued operations:                                                       |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations, net of income tax benefit
$33.7 (2002) and $8.0 (2001) |   |                    | (279.3 | )                 |   |          | (810.2 | )    |   |          | (1,163.3 | ) |   |          | (2,447.2 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Gain on sale of discontinued operations, net of income tax
expense of $4.6                  |   |                    | 0.2    |                   |   |          |       |      |   |          | 8.6      |   |   |          |         |  
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|(Loss) from discontinued operations                                            |                                                                                             |   | (279.1             | )      |                   |   | (810.2   | )      |      |   | (1,154.7 | )        |   |   | (2,447.2 | )       
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|Net (loss)                                                                     |                                                                                             |   | (448.8             | )      |                   |   | (1,031.5 | )      |      |   | (1,610.8 | )        |   |   | (3,103.6 | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Preferred stock dividends (contractual dividends of $279.4 (2002))             |                                                                                             |   | (1.6               | )      |                   |   | (88.7    | )      |      |   | (143.5   | )        |   |   | (229.6   | )       
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|Net (loss) available to common shareholders                                    |                                                                                             | $ | (450.4             | )      |                   | $ | (1,120.2 | )      |      | $ | (1,754.3 | )        |   | $ | (3,333.2 | )       
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|Basic and diluted net (loss) per common share:                                 |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from continuing operations                                                           |   | $                  | (0.62  | )                 |   | $        | (1.12  | )    |   | $        | (2.17    | ) |   | $        | (3.21    | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations                                                         |   |                    | (1.01  | )                 |   |          | (2.93  | )    |   |          | (4.17    | ) |   |          | (8.88    | )
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                               | Net (loss) per common share                                                                 |   | $                  | (1.63  | )                 |   | $        | (4.05  | )    |   | $        | (6.34    | ) |   | $        | (12.09   | )
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         
|                                                                               | Weighted average shares                                                                     |   |                    | 276.6  |                   |   |          | 276.5  |      |   |          | 276.6    |   |   |          | 275.8    |  
|                                                                               |                                                                                             |   |                    |        |                   |   |          |        |      |   |          |          |   |   |          |         

See accompanying notes.

4



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##### Table of Contents






NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Statement of Shareholders (Deficiency)
(Unaudited)
(in millions)

|                                                      |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     |  | 
|----------------------------------------------------- | ----- |  | ---------------- |  | -------------- | - | ------ |  | --- |  | ----- |  |  | - | --- |  | 
|                                                      |       |  | Series Preferred |  |                |   |        |  |     |  |      
|                                                      |       |  | Stock $.01 Par   |  | Common Stock  
|                                                      |       |  | Value            |  | $.01 Par Value
|                                                      |       |  |                  |  |               
|                                                      |       |  | Shares           |  | Par            |   | Shares |  | Par
|                                                      |       |  |                  |  |                |   |        |  |    
|Balance, December 31, 2001                            |       |  | 3.0              |  |                | $ |       |  |     |  | 276.6 |  |  | $ | 2.8 | 
|                                                     
|                                                     
|                                                     
|                                                     
|Accreted dividends on preferred stock                 |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Accretion of discount on preferred stock              |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Comprehensive loss:                                   |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Net loss for the nine months ended
September 30, 2002 |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Currency translation adjustment                       |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Unrealized net losses on investments                  |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|Unrealized net losses on derivatives                  |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|                                                     
|                                                     
|                                                     
|                                                     
|                                                      | Total |  |                  |  |                |   |        |  |     |  |       |  |  |   |     |  | 
|                                                      |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 
|Balance, September 30, 2002                           |       |  | 3.0              |  |                | $ |       |  |     |  | 276.6 |  |  | $ | 2.8 | 
|                                                      |       |  |                  |  |                |   |        |  |     |  |       |  |  |   |     | 

5



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Statement of Shareholders (Deficiency)
(Unaudited)  continued
(in millions)

|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |   | 
|----------------------------------------------------- | ----- | - | ---------- | - | ------------- | - | ----------- | -------- | ----------- | - | ------------------ | - | --------- | - | ---------- | - | ---------- | - | ----- | - |  | - | --------- | - | 
|                                                      |       |   |            |   |               |   |             |          |             |   | Accumulated Other  |   |           |   |           
|                                                      |       |   |            |   |               |   |             |          |             |   | Comprehensive Loss |   |           |   |           
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |           
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   | Unrealized |   | Unrealized |   |       |   | 
|                                                      |       |   | Additional |   |               |   |             |          | Foreign     |   | Net                |   | Net       |   |            |   |           
|                                                      |       |   | Paid-In    |   | Comprehensive |   | Currency    |          | Losses on   |   | Losses on          |   |           |   |           
|                                                      |       |   | Capital    |   | Loss          |   | Translation |          | Investments |   | Derivatives        |   | (Deficit)
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |          
|Balance, December 31, 2001                            |       | $ | 13,720.0   |   |               |   |             |          |             | $ | (1,042.5           | ) |           | $ | (15.3      | ) |            | $ | (15.0 | ) |  | $ | (19,192.4 | )
|                                                     
|                                                     
|                                                     
|                                                     
|Accreted dividends on preferred stock                 |       |   | (125.1     | ) |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  
|                                                     
|                                                     
|                                                     
|                                                     
|Accretion of discount on preferred
stock              |       |   | (18.3      | ) |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  
|                                                     
|                                                     
|                                                     
|                                                     
|Comprehensive loss:                                   |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  
|                                                     
|                                                     
|                                                     
|                                                     
|Net loss for the nine months ended
September 30, 2002 |       |   |            |   |               | $ | (1,610.8    | )        |             |   |                    |   |           |   |            |   |            |   |       |   |  |   | (1,610.8  | )
|                                                     
|                                                     
|                                                     
|                                                     
|Currency translation adjustment                       |       |   |            |   |               |   | 389.9       |          |             |   | 389.9              |   |           |   |            |   |            |   |       |   |  |   |           |  
|                                                     
|                                                     
|                                                     
|                                                     
|Unrealized net losses on investments                  |       |   |            |   |               |   | (2.6        | )        |             |   |                    |   |           |   | (2.6       | ) |            |   |       |   |  |   |           |  
|                                                     
|                                                     
|                                                     
|                                                     
|Unrealized net losses on derivatives                  |       |   |            |   |               |   | (15.8       | )        |             |   |                    |   |           |   |            |   |            |   | (15.8 | ) |  |   |           |  
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  
|                                                      | Total |   |            |   |               |   | $           | (1,239.3 | )           |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |   | 
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  
|Balance, September 30, 2002                           |       | $ | 13,576.6   |   |               |   |             |          |             | $ | (652.6             | ) |           | $ | (17.9      | ) |            | $ | (30.8 | ) |  | $ | (20,803.2 | )
|                                                      |       |   |            |   |               |   |             |          |             |   |                    |   |           |   |            |   |            |   |       |   |  |   |           |  

See accompanying notes.

6



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##### Table of Contents






NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(in millions)

|                                                                        |  |                   |        |      |  |   |        |  
|----------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | - | ------ | -
|                                                                        |  | Nine Months Ended
|                                                                        |  | September 30,    
|                                                                        |  |                  
|                                                                        |  | 2002              |        | 2001
|                                                                        |  |                   |        |     
|Net cash (used in) provided by operating activities                     |  | $                 | (97.7  | )    |  | $ | 19.1   |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Investing activities                                                    |  |                   |        |      |  |   |        |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Purchase of fixed assets                                                |  |                   | (74.7  | )    |  |   | (194.7 | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Proceeds from sale of NTL Australia                                     |  |                   | 428.8  |      |  |   |       |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Investment in and loans to affiliates                                   |  |                   | (15.3  | )    |  |   | (120.5 | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Increase in other assets                                                |  |                   | (8.9   | )    |  |   | (54.5  | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Loan to NTL (UK) Group, Inc.                                            |  |                   | (129.2 | )    |  |   |       |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Loan from NTL Communications Corp.                                      |  |                   |       |      |  |   | 150.0  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Due from CoreComm                                                       |  |                   |       |      |  |   | (15.0  | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Proceeds from sales of assets                                           |  |                   | 8.9    |      |  |   |       |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Purchase of marketable securities                                       |  |                   | (52.8  | )    |  |   |       |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Proceeds from sales of marketable securities                            |  |                   | 42.0   |      |  |   | 60.3   |  
|                                                                        |  |                   |        |      |  |   |        |  
|Net cash provided by (used in) investing activities                     |  |                   | 198.8  |      |  |   | (174.4 | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Financing activities                                                    |  |                   |        |      |  |   |        |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Proceeds from borrowings, net of financing costs                        |  |                   | 102.5  |      |  |   | 305.2  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Principal payments                                                      |  |                   | (1.5   | )    |  |   | (67.3  | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Repayment of the NTL Australia bank loan                                |  |                   | (121.7 | )    |  |   |       |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Contribution from NTL Communications Corp.                              |  |                   |       |      |  |   | 10.6   |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Distribution to NTL Communications Corp.                                |  |                   | (3.9   | )    |  |   | (9.0   | )
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Proceeds from exercise of stock options and warrants                    |  |                   |       |      |  |   | 13.0   |  
|                                                                        |  |                   |        |      |  |   |        |  
|Net cash (used in) provided by financing activities                     |  |                   | (24.6  | )    |  |   | 252.5  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Effect of exchange rate changes on cash                                 |  |                   | 12.3   |      |  |   | (2.1   | )
|                                                                        |  |                   |        |      |  |   |        |  
|Increase in cash and cash equivalents                                   |  |                   | 88.8   |      |  |   | 95.1   |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Cash and cash equivalents at beginning of period                        |  |                   | 230.7  |      |  |   | 127.9  |  
|                                                                        |  |                   |        |      |  |   |        |  
|Cash and cash equivalents at end of period                              |  | $                 | 319.5  |      |  | $ | 223.0  |  
|                                                                        |  |                   |        |      |  |   |        |  
|Supplemental disclosure of cash flow information                        |  |                   |        |      |  |   |        |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Cash paid during the year for interest exclusive of amounts capitalized |  | $                 | 485.3  |      |  | $ | 771.6  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Income taxes paid                                                       |  |                   | 1.3    |      |  |   | 8.4    |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Supplemental schedule of noncash financing activities                   |  |                   |        |      |  |   |        |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Accretion of dividends and discount on preferred stock                  |  | $                 | 143.4  |      |  | $ | 124.7  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Conversion of Convertible Notes                                         |  |                   |       |      |  |   | 128.3  |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Common stock and stock options issued for an acquisition                |  |                   |       |      |  |   | 4.3    |  
|                                                                       
|                                                                       
|                                                                       
|                                                                       
|Redeemable preferred stock issued for other assets                      |  |                   |       |      |  |   | 518.0  |  

See accompanying notes.

7



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##### Table of Contents






NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements

Note A  Petition for Relief under Chapter 11

On May 8, 2002, NTL Incorporated (NTL Incorporated) filed a petition for
relief under Chapter 11 (Chapter 11) of Title 11 of the United States Code
(the Bankruptcy Code) in the United States Bankruptcy Court for the Southern
District of New York (the Bankruptcy Court). NTL Incorporated filed jointly
with its subsidiaries NTL (Delaware), Inc., NTL Communications Corp., Diamond
Cable Communications Limited, Diamond Holdings Limited and Communications Cable
Funding Corp. NTL Incorporated and these subsidiaries are referred to as
Debtors. Under Chapter 11, certain claims in existence prior to the filing of
the petitions for relief against the Debtors are stayed while the Debtors
continue business operations as debtor-in-possession. These claims are
reflected in the balance sheet as liabilities subject to compromise.
Additional claims (liabilities subject to compromise) may arise subsequent to
the filing date. Claims secured against the Debtors assets (secured claims)
also are stayed, although the holders of such claims have the right to seek
relief from the stay in the Bankruptcy Court.

The Debtors received approval from the Bankruptcy Court to pay or otherwise
honor certain of its prepetition obligations.

The Debtors have determined that there is insufficient collateral to cover the
interest portion of scheduled payments on certain of their prepetition debt
obligations, therefore the Debtors have discontinued accruing interest on these
obligations. For the nine months ended September 30, 2002, contractual
interest on those obligations amounts to $69.0 million, which is $41.1 million
in excess of reported interest expense. Total contractual interest
was $62.4 million and $167.3 million in the three and nine
months ended September 30, 2002, respectively.

Note B  Basis of Presentation

Throughout this report, NTL Incorporated together with its consolidated
subsidiaries are referred to as NTL or the Company.

The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information, including AICPA Statement of Position 90-7,
Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine months ended September 30, 2002 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 2002. For further information, refer to the consolidated
financial statements and footnotes thereto included in NTL Incorporateds
Annual Report on Form 10-K/A-2 for the year ended December 31, 2001.

As indicated below, substantial doubt exists about the Companys ability to
continue as a going concern. The accompanying consolidated financial statements
have been prepared assuming that the Company will continue as a going concern.
The financial statements do not include any adjustments to reflect the possible
future effects on the recoverability of assets or classification of assets or
the amounts and classification of liabilities that may result from the outcome
of this uncertainty.

Certain prior period amounts have been reclassified to conform to the current
presentation.

Stock options, warrants and convertible securities are excluded from the
calculation of net loss per common share as their effect would be antidilutive.
At September 30, 2002 and 2001, NTL Incorporated had 172.8 million and 162.2
million shares, respectively, issuable upon the exercise of stock options and
warrants and the conversion of debt and preferred stock.

Note C  Recapitalization Process and Ability to Continue Operations

On May 8, 2002, NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed a pre-arranged joint reorganization
plan under Chapter 11 of the Bankruptcy Code (the Plan). NTLs operating
subsidiaries were not included in the Chapter 11 filing. On September 5, 2002,
the United States Bankruptcy Court for the Southern District of New York (the
Bankruptcy Court) confirmed the Plan. The consummation of the Plan is
subject to the satisfaction or waiver of certain conditions set forth in the
Plan. Among other things, the most substantial conditions include obtaining
exit financing for NTL and obtaining the consent of NTLs UK bank lenders to
such financing and to modifications to the terms of the UK bank facilities
acceptable to both NTL and NTLs official creditors committee. Although NTL
is currently finalizing negotiations with a group of potential lenders for such
an exit facility, there can be no assurance

8



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

that it will be able to reach final agreement on terms. If no agreement can be
reached and an alternate source of exit financing cannot be secured, NTL may
not be able to consummate the Plan. Moreover, NTL is currently in discussions
with the UK lenders regarding the above matters, but cannot be certain that
they will be resolved successfully. If we fail to meet either condition, the
Debtors would be unable to consummate the Plan and continue to remain in
Chapter 11, and there can be no assurance that an alternative plan of
reorganization could be reached in a timely manner or at all.

NTL has historically incurred operating losses and negative operating cash
flow. In addition, NTL required and expects to continue to require significant
amounts of capital to finance construction of its networks, connection of
customers to the networks, other capital expenditures and for working capital
needs including debt service requirements. NTL historically met these liquidity
requirements through cash flow from operations, amounts available under its
credit facilities, vendor financing and issuances of high-yield debt securities
and convertible debt securities in the capital markets and convertible
preferred stock and common stock to strategic investors. Both the equity and
debt capital markets have experienced periods of significant volatility,
particularly for securities issued by telecommunications and technology
companies. The ability of telecommunications companies to access those markets
as well as their ability to obtain financing provided by bank lenders and
equipment suppliers has become more restricted and financing costs have
increased. During some recent periods, the capital markets have been largely
unavailable to new issues of securities by telecommunications companies. NTL
Incorporateds public equity is no longer trading on the New York Stock
Exchange, and NTLs debt securities are trading at or near all time lows. These
factors, together with NTLs substantial leverage, means NTL does not currently
have access to its historic sources of capital.

In addition, there are no further funds available under NTLs UK credit
facilities and NTLs Swiss subsidiaries are currently unable to draw the
remaining undrawn amounts under the Cablecom credit facility. NTL missed
interest payments totaling $495.5 million between April 1, 2002 and November
13, 2002, all of which related to notes issued by NTL Incorporated and certain
of its subsidiaries. Upon emerging from Chapter 11, NTL intends to make any
required interest payments on the notes of Diamond Holdings. In accordance with
the Plan, NTL will not make future interest payments on its currently
outstanding publicly traded notes except notes issued by NTL (Triangle) LLC
and, upon emergence from Chapter 11, Diamond Holdings Limited.

Pursuant to the Plan, if consummated, NTL will be split into two separate
companies, one which will take the name NTL Incorporated, holding NTLs main UK
and Ireland assets (which we refer to as New NTL), and one which will be
called NTL Europe, Inc., holding NTLs continental European and certain other
assets (which we refer to as NTL Euroco). Upon consummation of the Plan, NTL
Euroco will hold Cablecom, NTLs cable business in Switzerland, and Premium TV
Limited, NTLs sports TV content and internet business in the UK, and will
retain NTLs investment interests in cable networks in Scandinavia and Germany
(B2 and iesy, respectively). Its interests will also include NTLs equity
investments in the cable channel content providers of the ITN News Channel and
The Studio Channel, as well as certain other assets.

Assuming the Plan is consummated, New NTLs and NTL Eurocos ability to meet
their respective funding requirements following consummation of the Plan are
dependent upon a number of factors, including the revenue generated by their
operating subsidiaries, their existing cash balances, and their ability to draw
upon an exit facility (in the case of New NTL) or any other financing. NTL will
be required to replace the DIP facility with an exit facility for New NTL and
its subsidiaries upon emergence from Chapter 11, in part because the DIP
facility will mature concurrently with NTLs emergence from Chapter 11, or on
December 1, 2002, whichever is earlier (unless such maturity is extended by the
DIP lenders). There can be no assurance that these sources of financing will
be or will remain available. Assuming consummation, each of New NTL and NTL
Euroco will require substantial funds for general corporate and other expenses
and may require additional funds for working capital fluctuations. Failure to
achieve profitability or maintain or achieve various other financial
performance levels could in the future diminish New NTLs and Eurocos
respective ability to sustain operations, meet financial covenants, obtain
additional funds required for capital expenditures or other purposes, and make
required payments on any indebtedness they have incurred, may incur or that may
then, as a result, become due. We can provide no assurance that New NTL and/or
NTL Euroco will be successful in raising additional financing if required, or
if successful, that the terms of such financing will be favorable. In the
event that NTL fails to consummate the Plan, the foregoing description will
continue to apply to NTL.

9



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

New NTL expects that it will require approximately $650 million to fund its
working capital and capital expenditures, net of cash from operations, and
certain payments required upon consummation of the Plan (namely the settlement
of recapitalization costs with NTL Euroco, the repayment or purchase of the £90
million loan from NTL (Delaware), Inc. to NTL (UK) Group Inc. and the UK credit
facilities amendment fee) in the twelve months from October 1, 2002 to
September 30, 2003. New NTL believes that cash, cash equivalents and
marketable securities on hand of $330.5 million at September 30, 2002, and the
cash available from the DIP facility and subsequently the planned exit facility
will be sufficient for New NTLs cash requirements during the twelve months
from October 1, 2002 to September 30, 2003 (assuming consummation of the Plan).
The Companys ability to meet its funding requirements upon consummation of
the Plan is dependent upon a number of factors, including the revenue generated
by its operating subsidiaries, its existing cash balances, and its ability to
obtain new financing. The Company currently expects that it will require
approximately $150 million to fund its working capital and capital
expenditures, net of cash from operations, in the twelve months from October 1,
2002 to September 30, 2003. The Company believes that cash, cash equivalents
and marketable securities on hand of $330.5 million at September 30, 2002 will
be sufficient for its and its subsidiaries cash requirements during the twelve
months from October 1, 2002 to September 30, 2003. In addition, upon
consummation of the Plan, NTL Euroco is currently expected to pay approximately
$120 million out of its cash on hand for (1) the payments to the holders of NTL
Incorporated, NTL (Delaware), Inc. and NTL Communications Corp. public notes,
and (2) for the redemption of a portion of NTL Incorporateds preferred stock,
net of cash to be received for (1) the repayment of the £90 million note
payable to NTL (Delaware), Inc. from NTL (UK) Group, Inc., (2) the
reimbursement by NTL Communications Corp. of the recapitalization costs paid on
its behalf, and (3) the France Telecom payment for the benefit of NTL Euroco.

If the exit facility is not obtained and the Plan is not consummated, NTL will
need to seek an extension of the DIP facility maturity or identify alternative
sources of financing.

It is anticipated that the Company will require substantial financing to
continue operations because, among other things, the Cablecom bank facilities
of $2,544.4 million at September 30, 2002 become repayable on April 30, 2003.
There can be no assurance that the Company or any of its subsidiaries, or
following consummation NTL Euroco and its subsidiaries, will be able to raise
sufficient funds to meet their liquidity requirements.

Over the long term, New NTL will continue to require cash to fund operations,
service its remaining debt and implement its strategy. In order to fund these
requirements, New NTL anticipates that it will use cash flow from operations
and may also need to issue additional debt or equity securities or may need to
secure additional bank financing. Given New NTLs current financial condition
and the restrictions on incurring additional debt that are expected to be
contained in the exit facility currently being negotiated, there can be no
assurance that these sources of funds will be available to New NTL.

During the recapitalization process, NTL has maintained normal and regular
trade terms with its suppliers and customers. There can be no assurance that
the Companys suppliers will continue to provide normal trade credit or credit
on acceptable terms, if at all, or that customers will continue to do business
or enter into new business with NTL. See also Risk Factors for a summary of
risks related to NTLs business in general and the recapitalization process in
particular.

Events Leading to the Proposed Recapitalization and Chapter 11 Filings

Beginning in January 2002, NTL was contacted by an unofficial committee of
bondholders regarding the commencement of a comprehensive and consensual
restructuring process. NTL was informed at that time that the members of the
unofficial steering committee of bondholders owned, in the aggregate, more than
50% of the outstanding principal amount of NTLs notes. In connection with the
restructuring process, the steering committee of the unofficial committee of
bondholders retained advisors to facilitate the negotiations.

On January 31, 2002, NTL announced that it had appointed Credit Suisse First
Boston, JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen its balance sheet and reduce debt
and put an appropriate capital structure in place for its business.
Subsequently, NTL evaluated various recapitalization alternatives, and met with
a number of strategic investors, to effect a comprehensive consensual
reorganization in a timely manner to minimize negative effects on its business
operations. Discussions with such strategic investors did not result in a
proposal which NTLs board of directors believed was comparable or superior to
the value provided to its stakeholders by the proposed plan of reorganization.

10



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

Promptly upon obtaining the requisite waivers from the lenders under its credit
facilities, in March 2002, NTL commenced negotiations with the steering
committee of the unofficial committee of bondholders and its legal and
financial advisors. On April 16, 2002, the Company announced that it had
reached a comprehensive agreement in principle with the unofficial committee
and France Telecom, a significant holder of NTL Incorporateds preferred stock,
on implementing a recapitalization plan.

To implement the proposed recapitalization, on May 8, 2002, the Debtors filed
cases and a pre-arranged joint reorganization plan under Chapter 11. NTLs
operating subsidiaries were not included in the Chapter 11 filing. On June 21,
2002, the United States Trustee appointed an official unsecured creditors
committee. The creditors committee is comprised of the three indenture
trustees for the debt securities of NTL and the members of the steering
committee of NTLs bondholders. The members of the creditors committee are:
The Bank of New York; Wilmington Trust Company; Wells Fargo Bank Minnesota,
National Association; Angelo Gordon & Co. LP; Capital Research & Management
Company; Franklin Mutual Advisers, LLC; Oaktree Capital Management LLC; Salomon
Brothers Asset Management; Appaloosa Management, LP; Fidelity Management &
Research Co.; SAB Capital Management, L.P.; and W.R. Huff Asset Management Co.,
LLC.

The Plan was confirmed by the Bankruptcy Court on September 5, 2002.
Consummation remains subject to the satisfaction or waiver of certain
conditions described above.

Assuming the Plan is consummated, the Plan will result in the cancellation of
all of NTL Incorporateds outstanding shares of common stock, preferred stock
and redeemable preferred stock, and the cancellation of all of the publicly
held notes of NTL Incorporated, NTL (Delaware), Inc. and NTL Communications
Corp. and the transfer of the publicly held notes of Diamond Cable
Communications Limited to New NTL. In addition, when the Plan is implemented,
NTL will be discharged from its obligation to pay dividends accruing on the
canceled preferred stock and interest accruing on the canceled notes. The Plan
contemplates that the UK bank debt and the notes issued by NTL (Triangle) LLC
and Diamond Holdings will remain in place. NTL will be split into New NTL and
NTL Euroco.

The filing of the petitions seeking relief filed under Chapter 11 constituted
an event of default under the indentures of each of the Debtors and amounts
outstanding under these indentures became immediately due and payable. No
action has been taken to date in respect of those defaults and any such action
likely would be barred by the automatic stay that exists by virtue of the
Chapter 11 filings. The filing of the Debtors Chapter 11 petitions also
constituted an event of default under NTLs UK credit facilities and the
Cablecom credit facility, allowing the lenders thereunder to declare amounts
outstanding to be immediately payable. Those lenders have not taken any action
to date in respect of those defaults.

Recapitalization Expense

Recapitalization items, net of $11.6 million in the nine months ended September
30, 2002 includes $0.1 million for employee retention related to substantially
all of our UK employees and $12.9 million for financial advisor, legal,
accounting and consulting costs. These costs are net of $1.4 million of
interest earned on accumulated cash since the Chapter 11 filing on May 8, 2002.
We expect to incur approximately $26.0 million in additional recapitalization
costs until we complete the process. The proposed joint reorganization plan
provides that recapitalization costs will be allocated between NTL UK and
Ireland and NTL Europe.

Recapitalization items, net was a $10.1 million reversal of expense in the
three months ended September 30, 2002. This reflects a $12.2 million reduction
in our share of the total recapitalization costs incurred in the first half of
2002.

Recapitalization items, net consist of the following:

|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 
|------------------------------------------------------------------ |  | ------------------ | ---- | ----------------- |  | ---- | - | ---- |  | - | ----- | - |  | - | - | 
|                                                                   |  | Three Months Ended |      | Nine Months Ended
|                                                                   |  | September 30,      |      | September 30,    
|                                                                   |  |                    |      |                  
|                                                                   |  | 2002               |      | 2001              |  | 2002 |   | 2001
|                                                                   |  |                    |      |                   |  |      |   |     
|                                                                   |  | (in millions)     
|Payroll and related                                                |  | $                  | 0.1  |                   |  | $    |  |      |  | $ | (0.1  | ) |  | $ |  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Professional fees                                                  |  |                    | 9.2  |                   |  |      |  |      |  |   | (12.9 | ) |  |   |  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Interest earned on
accumulated cash from
Chapter 11 proceeding (1) |  |                    | 0.8  |                   |  |      |  |      |  |   | 1.4   |   |  |   |  | 
|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 
|                                                                   |  | $                  | 10.1 |                   |  | $    |  |      |  | $ | (11.6 | ) |  | $ |  | 
|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 

11



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

Details of operating cash receipts and payments resulting from the
recapitalization, including amounts included in discontinued
operations, are as follows:

|                                                     |  |                    |       |  
|---------------------------------------------------- |  | ------------------ | ----- | -
|                                                     |  | Nine Months Ended 
|                                                     |  | September 30, 2002
|                                                     |  |                   
|                                                     |  | (in millions)     
|Interest income (1)                                  |  | $                  | 1.4   |  
|                                                    
|                                                    
|                                                    
|                                                    
|Payroll and related costs paid                       |  |                    |      |  
|                                                    
|                                                    
|                                                    
|                                                    
|Professional fees                                    |  |                    | (45.9 | )
|                                                     |  |                    |       |  
|Net operating cash flows from recapitalization items |  | $                  | (44.5 | )
|                                                     |  |                    |       |  



|(1) |  | Interest income resulting from the recapitalization is for the period May
8, 2002 through September 30, 2002.
|--- |  | -------------------------------------------------------------------------------------------------------------

DIP Facility

In connection with the Plan, some members of the official unsecured creditors
committee of bondholders committed to provide up to $500 million of new debt
financing to enable the business operations of NTL Incorporated and some of its
subsidiaries to have access to sufficient liquidity to continue ordinary
operations during the Chapter 11 process. The Bankruptcy Court approved a DIP
facility in the principal amount of $630 million (including a $130 million
commitment from NTL (Delaware), Inc. and the $500 million from certain members
of the creditors committee) in an order entered on July 3, 2002. On July 15,
2002, the various lenders under the DIP facility and NTL (Delaware), Inc.
entered into the DIP facility agreement with Communications Cable Funding
Corp., a wholly-owned subsidiary of NTL Communications Corp., to provide $630
million in financing to Communications Cable Funding Corp.

Under the DIP facility agreement, the loan structure contains three tranches
that rank equally with each other. All amounts owed under the DIP facility
agreement are required to be paid in full no later than the earlier of (i) the
consummation of the Plan, (ii) December 1, 2002, and (iii) the date on which
all of the term loans become due and payable in full under the DIP facility
agreement, whether by acceleration or otherwise (unless maturity is extended by
the DIP lenders).

On July 17, 2002, NTL drew the first tranche available under the facility in
the amount of $229.0 million. As of September 30, 2002, the total amount
outstanding under the DIP facility was $229.0 million.

In connection with the commitment, NTL Incorporated and its debtor subsidiaries
paid a commitment fee to the bondholder DIP lenders equal to 2% of the $500
million commitment (i.e., $10 million) in May 2002. In connection with the
closing of the DIP facility, NTL Incorporated and its debtor subsidiaries paid
a closing fee to the DIP lenders equal to 2% of the $630 million commitment
(i.e., $12.6 million) in July 2002.

Each term loan under the DIP facility bears interest on the unpaid principal
amount for three months from July 15, 2002 at the rate of 11% per annum. With
respect to each successive three month period following that date, the rate per
annum will increase incrementally by 1% over the immediately preceding three
month period but will not exceed 18% per annum for any three month period.
Interest is payable in cash at least monthly. The DIP facility also includes
an unutilized commitment fee of 1/2% per annum on the aggregate principal
amount of unutilized commitments which is payable in cash each month.

NTL (Delaware), Inc. is also a lender under the DIP facility in the amount of
up to $130 million. NTL (Delaware), Inc. has cash on hand and NTL Incorporated
and its debtor subsidiaries and the steering committee of bondholders concluded
that the cash at NTL (Delaware), Inc. was to be used to partially fund the
reorganization of all of the debtors. Pursuant to the terms of the DIP
facility, NTL (Delaware), Inc. receives fees, will receive interest if and when
it makes any loans, and is entitled to the same protections as the other
bondholder DIP lenders.

12



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

Under the DIP facility agreement, Communications Cable Funding Corp. is the
borrower, NTL Incorporated, NTL (Delaware), Inc. and NTL Communications Corp.
are guarantors. NTL Communications Corp. is also a co-obligor of the loans from
NTL (Delaware), Inc. Under the DIP facility agreement, with certain exceptions,
the cash (except for the DIP facility proceeds) of the borrower and the
guarantors is cash collateral for the DIP facility and will not be used or
transferred for any purpose whatsoever without the consent of the bondholder
DIP lenders. All funding needs of the Debtors will be funded through the
proceeds of the DIP facility, in accordance with a budget and the terms of the
DIP facility agreement.

A copy of the DIP facility agreement was attached as an exhibit to NTL
Incorporateds Current Report on Form 8-K filed with the Securities and
Exchange Commission on July 19, 2002.

Exit Facility

Because of the short maturity of the DIP facility and the longer term liquidity
needs of NTL, as well as the requirements under the Bankruptcy Code for
confirmation of and the conditions to consummation of the Plan, NTL requires an
exit financing facility for New NTL. The exit financing or any alternative
financing would refinance (at least in part) the DIP facility and be used as
consideration for the refinancing or repurchase of a £90 million note payable
to NTL (Delaware), Inc. from NTL (UK) Group Inc. NTL is currently finalizing
discussions with a group of lenders regarding the exit facility, although given
the unfavorable present market conditions for telecommunications companies
generally, there can be no assurance an agreement for an exit facility with
acceptable terms will be reached. If acceptable exit financing is not
obtained, the Plan could not be consummated and NTL could not emerge from
Chapter 11 in accordance with the Plan.

NTL expects that the exit facility will be secured by various assets of New
NTL, including those which secure the DIP facility, will rank senior to all
current and future subordinated debt of New NTL, and will be guaranteed by
certain subsidiaries of New NTL.

NTL also expects that the exit facility will impose operating and financial
restrictions on New NTL and its subsidiaries. These restrictions will
significantly limit or prohibit, among other things, New NTLs ability and the
ability of its subsidiaries to incur additional indebtedness, pay dividends, or
make distributions in respect of capital stock, make other restricted payments,
enter into sale and leaseback transactions, create liens upon assets, enter
into transactions with affiliates or related persons, sell assets, or
consolidate, merge, or sell all or substantially all of their assets. NTL
anticipates that these restrictive covenants could materially impact New NTLs
ability to finance future operations or capital needs through debt or equity
financing or to engage in other business activities.

The terms, covenants, and conditions of an exit facility have not been
finalized and remain subject to negotiation and final documentation, as well as
approval by NTLs UK bank lenders to its terms.

The exit facility for New NTL and its subsidiaries will not be available to NTL
Euroco. It is anticipated that NTL Euroco and its subsidiaries will require
substantial financing to continue operations because, among other things, the
Cablecom bank facilities become repayable on April 30, 2003, unless otherwise
refinanced. There can be no assurance that NTL Euroco (or any subsidiary
thereof) will be able to raise sufficient funds to meet its liquidity
requirements following consummation.

The Plan

In addition to the split into New NTL and NTL Euroco, the following are the
details of the Plan:



| |  | Holders of notes of NTL Incorporated (other than France Telecom), NTL (Delaware), Inc.
(other than France Telecom), NTL Communications Corp. and Diamond Cable Communications
Limited will in the aggregate receive 100% of the initial common stock of New NTL
(excluding shares issuable in the rights offerings and upon the exercise of warrants
(discussed below) and upon the exercise of options which will be granted to certain
employees of New NTL).
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

13



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations (continued)



| |  | Holders of notes of NTL Incorporated (other than France Telecom), NTL (Delaware), Inc.
(other than France Telecom) and NTL Communications Corp. will in the aggregate receive
(i) 100% of the preferred stock of NTL Euroco and (ii) a certain amount of cash as
specified in the Plan. Holders of the subordinated notes of NTL Incorporated (other
than France Telecom), NTL (Delaware), Inc. (other than France Telecom) and NTL
Communications Corp. will in the aggregate receive 86.5% of the initial common stock
of NTL Euroco (excluding shares issuable upon the exercise of options which will be
granted to certain employees of NTL Euroco).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Holders of senior notes of NTL Communications Corp. will receive the value of a
specified number of shares of common stock of NTL Euroco pursuant to the amended joint
reorganization plan. Notes of NTL Communications Corp.s subsidiaries Diamond Holdings
Limited and NTL (Triangle) LLC will remain outstanding and interest payments will be
made on the notes of NTL (Triangle) LLC and, upon emergence from Chapter 11, the notes
of Diamond Holdings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
| |  | In addition to the above, holders of several series of NTLs outstanding convertible
subordinated notes were granted an option to elect to purchase additional shares of
New NTL common stock (and accompanying Series A Warrants) not subscribed for in the
equity rights offering as described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| |  | Current preferred and common stockholders of NTL Incorporated, including France
Telecom, will receive Series A warrants to purchase common stock of New NTL and have
received equity rights entitling them to purchase common stock of New NTL. For each
share of common stock purchased upon exercise of equity rights, the person exercising
such equity rights will receive a Series A warrant to purchase one share of common
stock of New NTL. The Series A warrants will be exercisable for a period of eight
years at an exercise price of $77.47 per share. The exercise price and the number of
shares to be received upon exercise of the Series A warrants is subject to customary
adjustments for stock splits, stock recapitalizations and distributions of property
(other than cash) to holders of New NTL common stock. The exercise price per share of
New NTL common stock under the equity rights offering and the noteholder election
option was $25.28, which NTL expects will substantially exceed the likely initial
market price for a share of New NTL common stock upon consummation, and which is also
subject to adjustment consistent with the Series A warrants.
| 
| |  | The equity rights offering and the noteholder election option expired on October 3,
2002. Since the expiration of the equity rights offering and the noteholder election
option, NTL has allowed equity holders who have exercised equity rights and
noteholders who have exercised their noteholder election option to revoke such
exercises. As of November 12, 2002, there were a total of 2,654 exercises of equity
rights (including oversubscriptions) and 1,861 exercises of the noteholder election
option which had not been revoked. Prior to consummation of the Plan, NTL will
continue to permit persons who have exercised equity rights and the noteholder
election option to revoke their exercise so the final number of exercises may be
lower.                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| |  | Current preferred stockholders, other than France Telecom, will receive approximately
3.2% and current common stockholders, other than France Telecom, will receive
approximately 10.3% of the primary equity of NTL Euroco. France Telecom will also
receive NTL Incorporateds 27% interest in Noos, pursuant to a pledge of such interest
to France Telecom given at the time of its acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

NTL has received a conditional approval to have the shares of common stock and
Series A warrants of New NTL quoted on the Nasdaq National Market upon
consummation of the Plan. However, this approval is conditioned upon, among
other things, New NTLs ability to meet the $5.00 minimum bid requirement of
the Nasdaq National Market listing requirements on the first day of trading.
There can be no assurance that this requirement will be met, or that in the
future New NTL will be able to meet other continued listing requirements of the
Nasdaq National Market. NTL currently expects that the NTL Euroco common stock
and preferred stock will not be quoted on any market or listed on any
securities exchange. There may be no trading market for the common stock and
the preferred stock of NTL Euroco.

On November 12, 2002, NTL filed a motion with the Bankruptcy
Court to allow it, after consultation with the Committee, to reduce by
one-third the number of authorized shares of New NTL common stock and to reduce
by three-fourths the number of shares of New NTL common stock issued and
reserved for issuance under the Plan. If the motion is approved by the
Bankruptcy Court, NTL would take this step only (i) after consultation with the
Committee and (ii) if NTL were to determine, after an evaluation of the trading
prices of the shares of New NTL common stock on the when-issued market prior
to the consummation of the Plan, that a reduction in the number of shares of
New NTL common stock is necessary to better enable New NTL to satisfy the first
trading day minimum closing bid price per share requirement of NASDAQ.

14



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

With respect to the proposed preferred shares of NTL Euroco to be issued upon
consummation, prior to consummation of the Plan, NTL may file a motion with the
Bankruptcy Court seeking to modify the Plan to reduce the liquidation
preference from $1,000.00 per share of preferred stock of NTL Euroco, plus
accrued and unpaid dividends, to $50.00 per share of preferred stock of NTL
Euroco, plus accrued and unpaid dividends. As a result of the aforementioned
adjustment (i) the number of shares of preferred stock of NTL Euroco authorized
under the NTL Euroco Amended and Restated Certificate of Incorporation would be
increased from 1,000,000 to 20,000,000 and (ii) 8,000,000 shares of NTL Euroco
preferred stock would be authorized under the NTL Euroco Amended and Restated
Certificate of Incorporation. This is intended to enhance the ability for
these shares to trade if a trading market develops.

Bank Waivers

Before NTL could commence negotiations with the unofficial committee of
bondholders, it was necessary to obtain waivers from the lenders under its UK
credit facilities and the credit facility utilized by Cablecom GmbH, the
principal trading subsidiary of its Swiss companies. Effective March 8, 2002,
these lenders granted waivers which, until March 29, 2002, provided that the
commencement of negotiations with bondholders with a view to rescheduling its
debt would not constitute an event of default under the credit facilities.

In connection with the granting of the initial waivers, NTL agreed, among other
things:



| |  | to provide the lenders under the UK credit facilities with a 13 week rolling
cash flow projection (updated every two weeks);                                                 
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | to keep the lenders informed of, and to provide documents in connection with,
negotiations with bondholders or strategic investors or concerning proposed
asset dispositions;
| 
| |  | not to repurchase NTL notes; and                                                                                                                                             
| 
| |  | not to make an exchange offer for NTL notes or enter into an agreement with
NTL bondholders, subject to some exceptions, without the consent of the
lenders.                 

Effective March 28, 2002, the lenders under the credit facilities agreed to
amend the initial waivers. The amendments to the initial waivers extended the
duration of the initial waivers to April 29, 2002 in the case of the UK credit
facilities or May 14, 2002 in the case of the Cablecom facility, unless the
missed interest payments on April 1, 2002 were remedied or a sufficient number
of bondholders agreed to forbear in respect of such non-payment, in which case,
the UK credit facilities waivers would be extended to May 14, 2002. As a
condition to the waivers continuing effectiveness, the UK lenders required NTL
(Delaware), Inc. to loan £90 million to NTL (UK) Group, Inc. following receipt
of the proceeds from the sale of NTL Australia. This loan is structurally
senior to the outstanding public notes issued by NTL but contractually
subordinated to the working capital facility. In connection with the amendments
to the waivers, NTL affirmed the provisions of the initial waivers and in
addition, NTL agreed, among other things, to:



| |  | provide the bank lenders a timeline setting forth the steps proposed to be taken in connection with the
recapitalization and the dates by which such steps are to be taken;                                                                            
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | use reasonable endeavors to consider with the lenders under the Cablecom credit facility possible means
of credit enhancement;                                                                                                                         
| 
| |  | provide the lenders under the Cablecom credit facility, by April 12, 2002, with an updated structure
chart of NTL as well as a contingency business plan for Cablecom in the event that sufficient additional
funding for Cablecom is not obtained; and
| 
| |  | pay legal, accounting and other advisory fees of the agent and the coordinators of the lending
syndicates.                                                                                                                                             

15



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

The amended waivers also prohibited NTL from commencing voluntary dissolution
proceedings, including proceedings under Chapter 11, without the consent of
these lenders. As a consequence, NTL cannot enter into a binding agreement
with the unofficial bondholder committee or implement the proposed plan without
the consent of the bank lenders. Nor, as of the date of this Form 10-Q, are
there any current waivers from NTLs secured lenders and NTL is therefore in
default under its UK credit facilities and the Cablecom credit facility. The
lenders under those credit facilities are therefore entitled to declare the
principal amount of the outstanding debt immediately due and payable and to
enforce the security taken to secure those facilities. It is a condition to
consummation of the Plan that the UK credit facilities are restated on terms
acceptable to the Debtors and the official creditors committee. In connection
with the Plan, it is intended that the existing events of default under the
credit facilities will be cured by waiver or amendment with effect from the
Effective Date of the Plan.

As of December 31, 2001, Cablecoms and various of its subsidiaries
liabilities exceeded their respective assets. As a consequence, under Swiss
law, those entities were deemed to be overindebted. Under Swiss law, unless
the overindebtedness were rectified, those entities would have been required to
commence an insolvency proceeding in Switzerland.

On April 30, 2002, Cablecom reached an agreement with the lenders under the
Cablecom credit facility under which the defaults subsisting at that time were
remedied or were waived by the restatement of the credit agreement and the
grant of a waiver letter. Conditions subsequent such as the grant of new
security and the deposit of share certificates relating to minority
shareholdings pledged to the banks were imposed by these documents and other
new finance documents executed pursuant to the restatement. The
overindebtedness of Cablecom GmbH was resolved by a restructuring of
intra-group debt and temporary measures were introduced to ameliorate the
effect of the overindebtedness of Cablecoms subsidiaries.

As part of the April 30 agreement, the Cablecom lenders required the final
maturity date of the Cablecom credit facility to be brought forward to April
30, 2003. They also required steps to be initiated towards the sale of all, or
part of, or an investment in, the Cablecom group.

The problem of historic overindebtedness was resolved on June 26 and June 27,
2002 in certain of the overindebted subsidiaries when they were merged into
Cablecom and other members of the Cablecom group. The remaining overindebted
subsidiaries were not merged but the overindebtedness issue was ameliorated in
those subsidiaries by way of subordination agreements which obviated any
requirement to institute insolvency proceedings in respect of these companies.

Since the end of April 2002, the following defaults have occurred under the
Cablecom finance documents: (1) the indentures issued by NTL (Delaware), Inc.
and NTL Incorporated became payable and were not paid; (2) NTL (Delaware), Inc.
commenced negotiations with its creditors with a view to the general
rescheduling of its indebtedness and commenced cases under Chapter 11 pursuant
to which it reorganized its debt; (3) NTL (Delaware), Inc.s liabilities
exceeded the value of its assets and it was unable to pay its debts as they
became due; (4) Cablecom was unable to satisfy the conditions to allow it to
rollover revolving advances maturing in early July 2002; the revolving advances
remained unpaid for several days until Cablecom was able to obtain the consent
of the banks to waive the conditions to their rollover; and (5) certain of the
conditions subsequent imposed by the restated credit agreement, the waiver
letter and other finance documents executed pursuant to the restated credit
agreement had not been fulfilled.

Although it is not a condition to consummation of the Plan, it is proposed to
obtain a waiver of the events of default described in the preceding paragraph
by the effective date of the Plan.

Future developments in Cablecoms business, as well as external factors, could
result in a reemergence of the overindebtedness issue under Swiss law. In
particular, the Cablecom credit facility is due for repayment on April 30, 2003
and it will not be possible to repay the facility without substantial
investment from a third party or further borrowing.

16



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

Interest Payments on Public Notes

The Company and its subsidiaries have substantial interest payment obligations
under their existing indebtedness. The Company and its subsidiaries did not
make their scheduled interest payments on the respective due dates as follows:

|                                                    |  |                        |  |              
|--------------------------------------------------- |  | ---------------------- |  | -------------
|April 1, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $8.6 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% notes due 2010 |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|April 15, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|May 15, 2002:                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/4% notes due 2006  |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 6-3/4% notes due 2008  |  | $38.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-7/8% notes due 2009  |  | $15.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $65.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|June 15, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Communications Limited                              |  | 11-3/4% notes due 2005 |  | $31.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 7% notes due 2008      |  | $17.1 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL (Delaware), Inc.                                |  | 5-3/4% notes due 2009  |  | $34.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $82.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|July 15, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|August 1, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2006 |  | $60.4 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/8% notes due 2008 |  | $18.3 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 10% notes due 2008     |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 9-1/8% notes due 2008  |  | $5.0 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $94.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|August 15, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 10% notes due 2007     |  | $20.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 10-3/4% notes due 2007 |  | $22.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $42.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|September 30, 2002:                                 |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 13-1/4% notes due 2004 |  | $18.9 million
|                                                   
|October 1, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $9.3 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% notes due 2010 |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|October 15, 2002:                                   |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million

17



---



##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

Interest payments of $18.9 million were made, when due, on April 2, 2002 in
respect of the Diamond Cable Communications 13.25% senior discount notes due
2004. Upon emerging from Chapter 11, NTL intends to make any required interest
payments on the notes of Diamond Holdings Limited. In accordance with the Plan,
NTL will not make future interest payments on its currently outstanding
publicly traded notes except notes issued by NTL (Triangle) LLC (a non-debtor)
and, upon emergence from Chapter 11, Diamond Holdings Limited.

If the applicable issuer does not pay interest on these notes after a 30 day
grace period expires there is an event of default under the indenture in
respect of the notes on which the interest is due and unpaid. An event of
default entitles the trustee under the indenture or the holders of 25% of the
outstanding notes to declare the principal amount of those notes to be
immediately due and payable. Even if the maturity of those notes is not
accelerated after the 30 day grace period, such an event of default would also
result in an event of default in respect of other debt (commonly called cross
defaults) under most of NTLs other notes. Therefore, there was an event of
default for failure to pay interest on May 1, 2002 under the indentures
relating to the missed interest payments due April 1, 2002 and on May 16, 2002,
under the indentures relating to the missed interest payments due April 15,
2002. As a result, cross defaults occurred under NTLs other indentures at NTL
Communications Corp., NTL (Delaware), Inc., NTL Incorporated and under the UK
credit facilities and under the Cablecom credit facility. This gave holders of
the outstanding series of debt at these entities the right to accelerate
repayment of those debts by declaring the principal amount of the debts to be
immediately due and payable. As a result of the payment defaults as well as the
Debtors voluntary filing under Chapter 11 on May 8, 2002, there is an event of
default under all of NTLs credit facilities and the indentures governing all
of NTLs publicly traded debt, other than debt of NTL (Triangle) LLC. As a
result of the Chapter 11 filings, all of NTLs publicly traded debt, other than
the debt of NTL (Triangle) LLC, became immediately due and payable, pursuant to
the terms of the indentures governing such debt. The automatic stay of section
362 of the Bankruptcy Code prevents the holders of such debt from seeking to
enforce their collection rights under the indentures, except within the context
of the Chapter 11 cases, and even then only with the prior approval of the
Bankruptcy Court. However, NTL has received letters from the agents for the
lenders under the UK credit facilities reserving such lenders rights to
accelerate repayment of the facilities and to enforce the security granted in
respect of the facilities on account of the defaults thereunder, actions which
would not be prohibited by the automatic stay.

Inability to Pay Dividends On or Redeem Preferred Stock

NTL Incorporated failed to declare or pay dividends on its 13% Senior
Redeemable Exchangeable Preferred Stock due on February 15, 2002 in the amount
of $6.0 million, on May 15, 2002 in the amount of $6.2 million and on August
15, 2002 in the amount of $6.4 million. NTL Incorporated did not pay dividends
on its 5% cumulative participating convertible preferred stock held by France
Telecom on December 31, 2001 of $37.0 million, on March 31, 2002 of $37.5
million, on June 30, 2002 of $38.0 million and on September 30, 2002 of $38.4
million, or on its cumulative convertible preferred stock held by France
Telecom and a group of commercial banks on December 31, 2001 of $24.9 million,
on March 26, 2002 of $24.1 million, on June 30, 2002 of $42.1 million and on
September 30, 2002 of $41.2 million. Historically, payment of dividends has
been made in additional shares of preferred stock in the case of the 13%
preferred stock, the 5% cumulative participating preferred stock and the
cumulative convertible preferred stock. NTL Incorporated did not pay these
dividends due to a lack of available surplus under Delaware law. Under Delaware
law, NTL Incorporated cannot declare or pay dividends on or redeem its capital
stock, including its preferred stock, unless it has available surplus.

Pursuant to the terms of the 13% preferred stock, the unpaid dividends will
continue to accrue without interest until declared and paid. Pursuant to the
terms of the 5% cumulative convertible preferred stock and the cumulative
convertible preferred stock, the unpaid dividends will continue to accrue
without interest until declared and paid, together with an additional cash
dividend on the amount so unpaid at a rate of 2% per quarter for as long as the
dividends remain unpaid. The failure to declare these dividends is not a
default under any of NTLs existing agreements. With respect to the 13%
preferred stock and 5% cumulative convertible preferred stock, if dividends
remain unpaid for six quarters, the holders of each such series shall have the
right to vote separately as a class on all matters voted on by NTL Incorporated
shareholders and shall have the right, along with other holders of preferred
stock with similar default voting rights, to elect two additional directors to
NTL Incorporateds board. Pursuant to the Plan, all of these securities and
the related rights of the securities holders will be extinguished upon
effectiveness of the Plan.

18



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

In addition, the lack of available surplus meant that NTL Incorporated was not
able to redeem its Variable Coupon Redeemable Preferred Stock, Series A, which
is referred to as the Noos One Year Preferred, held by France Telecom, when it
became mandatorily redeemable on May 18, 2002. Because NTL Incorporated failed
to redeem the Noos One Year Preferred on May 18, 2002, pursuant to the
certificate of designation governing the Noos One Year Preferred, the holders
of such preferred stock have the right, along with other holders of preferred
stock with similar default voting rights, to elect two additional directors to
NTL Incorporateds board and shall have the right to vote separately as a
class, on all matters brought to NTL Incorporated shareholders. Pursuant to
the Plan, all of these securities and the related rights of the securities
holders will be extinguished when the Plan is consummated.

At the time of issuance of the Noos One Year Preferred, NTL Incorporated
pledged its shares of Noos to France Telecom to secure the mandatory redemption
obligation under the Noos One Year Preferred and the 6.5% Redeemable Preferred
Stock. Under the Plan and pursuant to this pledge, NTL will transfer its 27%
interest in Noos to France Telecom.

Credit Rating Downgrades

On April 3, 2002, credit rating agency Standard & Poors lowered the long-term
corporate credit rating on some of NTLs public debt to D from CCC-, citing
NTLs failure to make a bond interest payment due on April 1, 2002.

Delisting of NTL Incorporated Common Stock

On March 28, 2002, the New York Stock Exchange (NYSE) announced that it was
suspending NTL Incorporateds common stock from trading on the NYSE, which was
followed by the delisting of NTL Incorporateds common stock. NTL
Incorporateds common stock is currently quoted on the Over the Counter
Bulletin Board under the symbol NTLDQ.OB. Pursuant to the Plan, NTL
Incorporateds currently outstanding common stock will be cancelled upon
effectiveness of the Plan. The common stock and Series A warrants of New NTL
have been conditionally approved to trade on the Nasdaq National Market. The
common and preferred stock of NTL Euroco have not been approved to trade on any
exchange.

Sale of NTL Australia

On April 2, 2002, NTL announced that it had completed the previously announced
sale of its Australian broadcast business to Macquarie Communications
Infrastructure Holding Pty Limited for A$850 million (US$451.3 million). The
net proceeds from the sale were approximately A$575.3 million (US$304.5
million). At that time, the business bank debt outstanding totaled A$227.3
million (US$121.7 million).

On April 5, 2002, NTL (Delaware), Inc. loaned £90 million to NTL (UK) Group
Inc., which loan was funded by the proceeds of the sale of NTL Australia. This
loan is subordinated to NTLs UK credit facilities. Upon effectiveness of the
Plan, the £90 million note will be sold to Communications Cable Funding Corp.
for consideration comprising the principal amount plus accrued interest on the
note. The remaining proceeds of the sale of NTL Australia remain at NTL
(Delaware), Inc., and the Plan anticipates that such proceeds will form a
portion of the consideration to be offered to bondholders of NTL (Delaware),
Inc. and NTL Incorporated in satisfaction of their claims against those
companies.

Potential Sale of, or Outside Investment in, Cablecom

Under the terms of the agreement reached with its lenders, NTL Cablecom Holding
GmbH and/or Cablecom and/or NTL (Delaware), Inc. have agreed to approve any
outside investment in, or sale of all or a part of, the Cablecom Group, which
is acceptable to the Cablecom lenders.

Under an agreement made between the Cablecom lenders and NTL, if a sale of all
or a part of the Cablecom Group is consummated on or before August 31, 2003,
the Cablecom lenders will be entitled to receive additional interest equal to
20% of the net proceeds of such a sale after repayment of the amounts
outstanding under the Cablecom credit facility and related finance documents
and other expenses and taxes of the sale.

19



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations
(continued)

There can be no assurance that any outside investment in, or sale of all or a
part of, the Cablecom group pursuant to the Cablecom credit facility will be
possible on terms that are acceptable to the Cablecom lenders and/or
favorable to NTL (or, if the Plan is consummated, NTL Euroco). In
particular, in the current environment, there may be little or no value to
NTLs shareholding in the Cablecom group, which may result in NTL (or, if the
Plan is consummated, NTL Euroco) receiving little or no consideration for its
equity interest in the Cablecom group. Further, if a third party makes an
investment in the Cablecom group there can be no assurance that NTL (or, if
the Plan is consummated, NTL Euroco) will be able to maintain its power to
direct the management of the Cablecom group.

Cablecom will become a part of NTL Euroco following the consummation of the
Plan. Accordingly, if Cablecom is sold, assuming consummation of the Plan,
NTL Eurocos principal assets would be limited to Premium TV Limited and
certain minority holdings.

Investments in and Loans to Affiliates

On April 15, 2002, a funding request for approximately $20 million was
received by NTL under the terms of the investment agreement relating to NTLs
investment in B2. NTL informed B2 and the other principal investors that it
was not in a position to comply with this request for funding. The B2
investment agreement provides that if NTL fails to provide such funding, it
might be sued for non-payment and arguably could lose certain rights under
the B2 shareholders agreement. Pursuant to the applicable documents, if
this occurs the majority remaining shareholders may also elect to terminate
the B2 shareholders agreements with respect to NTL and exercise a
contractual right to acquire on a pro rata basis NTLs interest in B2 at 25%
of fair market value. If the remaining shareholders were able and elected to
exercise these rights, NTL could be forced to sell its stake in B2 at a
loss. On October 4, 2002, NTL filed a motion with the Bankruptcy Court to
reject the B2 investment agreement and shareholders agreements under section
365 of the Bankruptcy Code, and the Bankruptcy Court subsequently authorized
NTLs rejection of the agreements. On November 8, 2002, B2 and the remaining
shareholders filed proofs of claim with the Bankruptcy Court asserting their
right to recover: (1) more than $20 million from NTL in respect of the unpaid
funding request, (2) unspecified damages for NTLs failure to perform under
the relevant agreements, and (3) unspecified costs and expenses incurred in
the exercise of their remedies under the agreements. Additionally, B2 and
the remaining shareholders reserved their rights to avail themselves of any
remedies under the investment and shareholders agreements and to take any
actions to acquire NTLs interest in B2, as described above. NTL intends to
object to the proofs of claim filed by B2 and the remaining shareholders.
The Bankruptcy Court will adjudicate the claims of B2 and the remaining
shareholders and NTLs defenses thereto. Upon consummation of the Plan, NTL
Euroco will succeed to the rights and obligations of NTL described in this
paragraph.

Premium TV Limited, a wholly-owned subsidiary of NTL (Delaware), Inc., is
obliged to provide funding of up to approximately £19.0 million ($29.8
million) to fund various of its joint venture interests. Of this amount, the
payment of approximately £4.0 million ($6.3 million) has been guaranteed by
NTL (Delaware), Inc. If Premium TV Limited fails to provide its committed
funding under the relevant shareholder arrangements relating to these joint
ventures, Premium TV Limited and, in respect of the guaranteed amounts, NTL
(Delaware), Inc., may be sued for non-payment. As a result of the
recapitalization process, the relevant joint venture partners may assert that
they can compulsorily acquire Premium TV Limiteds interest in the relevant
joint venture at a third party appraisal valuation. Premium TV Limited is
currently in discussions with certain of these joint venture partners with a
view to restructuring the relevant joint ventures. In the event that these
discussions do not reach a resolution acceptable to Premium TV Limited,
Premium TV Limited may seek to discontinue these joint ventures and terminate
their activities. NTL believes, however, that it has various defenses and
protections under the Bankruptcy Code against such actions and intends to
enforce vigorously its rights and protections.

On September 24, 2002, Premium TV Limited, NTL (Delaware), Inc. and NTL
Incorporated agreed to vary the terms of the long-term joint venture
(referred to as the Football League Joint Venture) between Premium TV Limited
and the Football League Limited. Under the terms of the variation, upon the
payment of arrears of rights fees by Premium TV Limited, the Football League
Limited agreed to release Premium TV Limited from its obligation to fund the
payment of any further rights fees to the Football League Limiteds member
teams and its obligation to provide working capital funding to the Football
League Joint Venture. The Football League Limited also agreed to release NTL
(Delaware), Inc. from its guarantee of Premium TV Limiteds obligations and
to release NTL Incorporated from the related undertaking. In return, Premium
TV Limited agreed to waive repayment of loan capital by the Football League
Joint Venture and to provide certain ongoing services to the Football League
Joint Venture free of charge for an initial period. NTL (Delaware), Inc.
deposited £10.33 million into a designated single purpose account for use by
Premium TV Limited to finance the provision of such services. Premium TV
Limited and the Football League Limited also agreed to new terms relating to
the distribution of revenues generated by the Football League Joint Venture.
Following consummation of the Plan, Premium TV Limited will be an asset of
NTL Euroco.

20



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note C  Recapitalization Process and Ability to Continue Operations (continued)

On November 12, 2002, three of NTL Incorporateds wholly owned subsidiaries
entered into a support agreement with the other limited partners of eKabel
L.P. (the investment partnership through which NTL holds its equity stake in
iesy), an informal committee holding in excess of a majority of the principal
amount of the high-yield bonds of iesy and the NTL employees who have been
seconded to work for iesy. At this time, the iesy companies are not parties to
the support agreement, however the support agreement permits them to become
parties at any time. The support agreement contemplates an in-or out-of-court
restructuring of iesy Hessen GmbH and its subsidiaries. If the iesy
restructuring is completed as contemplated by the support agreement, Brigadoon
Ventures (one of the NTL subsidiaries) will receive a cash facilitation fee for
its cooperation in the iesy restructuring (not in respect of its equity stake
in iesy) of approximately $1.3 million, less its pro rata share of expenses
incurred at the eKabel partnership level. If the iesy restructuring is
completed and the cash facilitation fee is paid to Brigadoon Ventures, NTL
would no longer have any equity stake or other investment in iesy and would
receive no consideration for its equity stake in iesy. The support agreement
imposes certain obligations on the parties, including restricting transfer of
interests in iesy during the process, terminating the existing consulting
agreement between NTL and iesy, and reimbursing NTL for the secondment of NTL
employees. If the support agreement is terminated or the iesy restructuring is
not otherwise completed as contemplated by the support agreement, it is likely
NTL Europe would receive little, if any, value for its equity stake in the iesy
companies.

Relationships with Suppliers

The uncertainty over NTLs financial condition may adversely affect its
relationships with its suppliers. If NTLs suppliers become increasingly
concerned about its financial condition, they may demand quicker payment terms
or not extend normal trade credit, both of which could further adversely affect
its results of operations, financial condition and cash flows.

Note D  Discontinued Operations

Under the Plan which was confirmed by the Bankruptcy Court on September 5,
2002, NTL will be split into two separate companies, one holding substantially
all of NTLs UK and Ireland assets (referred to as New NTL), and the other
holding various continental European and other assets (referred to as NTL
Euroco). New NTL is accounted for as a discontinued operation, and
accordingly, New NTL is excluded from assets and liabilities of continuing
operations at September 30, 2002 and December 31, 2001 and from results of
continuing operations for the three and nine months ended September 30, 2002
and 2001.

On April 2, 2002, the Company announced that it had completed the previously
announced sale of its Australian broadcast business to Macquarie Communications
Infrastructure Holding Pty Limited for A$850 million (US$451.3 million) in an
all cash transaction. The net proceeds from the sale after the repayment of the
outstanding bank credit facility and transaction related costs were
approximately A$575.3 million (US$304.5 million). The Company recognized a gain
on the sale of approximately US$8.6 million, net of income tax expense of
US$4.6 million, in April 2002. NTL Australia is accounted for as a discontinued
operation, and accordingly, NTL Australia is excluded from assets and
liabilities of continuing operations at December 31, 2001 and from results of
continuing operations for the three and nine months ended September 30, 2002
and 2001.

The following is the condensed assets, liabilities and results of operations of
New NTL and NTL Australia (unaudited):

|                                  |  |                    |          |           |  |       |   |  |  |   |          | 
|--------------------------------- |  | ------------------ | -------- | --------- |  | ----- | - |  |  | - | -------- | 
|                                  |  | September 30, 2002
|                                  |  | (in millions)     
|                                  |  |                   
|                                  |  | New                |          | NTL       |  |       |   | 
|                                  |  | NTL                |          | Australia |  | Total
|                                  |  |                    |          |           |  |      
|Current assets                    |  | $                  | 1,178.8  |           |  | $     |  |  |  | $ | 1,178.8  | 
|                                 
|                                 
|                                 
|                                 
|Fixed assets, net                 |  |                    | 11,137.1 |           |  |       |  |  |  |   | 11,137.1 | 
|                                 
|                                 
|                                 
|                                 
|Other assets                      |  |                    | 1,204.0  |           |  |       |  |  |  |   | 1,204.0  | 
|                                  |  |                    |          |           |  |       |   |  |  |   |          | 
|Total assets                      |  | $                  | 13,519.9 |           |  | $     |  |  |  | $ | 13,519.9 | 
|                                  |  |                    |          |           |  |       |   |  |  |   |          | 
|Current liabilities               |  | $                  | 7,431.8  |           |  | $     |  |  |  | $ | 7,431.8  | 
|                                 
|                                 
|                                 
|                                 
|Non current liabilities           |  |                    | 89.9     |           |  |       |  |  |  |   | 89.9     | 
|                                 
|                                 
|                                 
|                                 
|Liabilities subject to compromise |  |                    | 10,050.0 |           |  |       |  |  |  |   | 10,050.0 | 
|                                  |  |                    |          |           |  |       |   |  |  |   |          | 
|Total liabilities                 |  | $                  | 17,571.7 |           |  | $     |  |  |  |   | 17,571.7 | 
|                                  |  |                    |          |           |  |       |   |  |  |   |          | 

21



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note D  Discontinued Operations (continued)

|                                  |  |                   |          |           |  |       |       |  |  |   |          | 
|--------------------------------- |  | ----------------- | -------- | --------- |  | ----- | ----- |  |  | - | -------- | 
|                                  |  | December 31, 2001
|                                  |  | (in millions)    
|                                  |  |                  
|                                  |  | New               |          | NTL       |  |       |       | 
|                                  |  | NTL               |          | Australia |  | Total
|                                  |  |                   |          |           |  |      
|Current assets                    |  | $                 | 1,002.7  |           |  | $     | 32.0  |  |  | $ | 1,034.7  | 
|                                 
|                                 
|                                 
|                                 
|Fixed assets, net                 |  |                   | 10,840.3 |           |  |       | 235.2 |  |  |   | 11,075.5 | 
|                                 
|                                 
|                                 
|                                 
|Other assets                      |  |                   | 1,027.1  |           |  |       | 137.8 |  |  |   | 1,164.9  | 
|                                  |  |                   |          |           |  |       |       |  |  |   |          | 
|Total assets                      |  | $                 | 12,870.1 |           |  | $     | 405.0 |  |  | $ | 13,275.1 | 
|                                  |  |                   |          |           |  |       |       |  |  |   |          | 
|Current liabilities               |  | $                 | 16,087.3 |           |  | $     | 71.1  |  |  | $ | 16,158.4 | 
|                                 
|                                 
|                                 
|                                 
|Non current liabilities           |  |                   | 122.7    |           |  |       | 111.9 |  |  |   | 234.6    | 
|                                 
|                                 
|                                 
|                                 
|Liabilities subject to compromise |  |                   |         |           |  |       |      |  |  |   |         | 
|                                  |  |                   |          |           |  |       |       |  |  |   |          | 
|Total liabilities                 |  | $                 | 16,210.0 |           |  | $     | 183.0 |  |  | $ | 16,393.0 | 
|                                  |  |                   |          |           |  |       |       |  |  |   |          | 

|                        |  |                                      |          |           |  |       |      |   |  |   |          |  
|----------------------- |  | ------------------------------------ | -------- | --------- |  | ----- | ---- | - |  | - | -------- | -
|                        |  | Nine Months Ended September 30, 2002
|                        |  | (in millions)                       
|                        |  |                                     
|                        |  | New                                  |          | NTL       |  |       |      |  
|                        |  | NTL                                  |          | Australia |  | Total
|                        |  |                                      |          |           |  |      
|Revenues                |  | $                                    | 2,419.0  |           |  | $     | 17.4 |   |  | $ | 2,436.4  |  
|                       
|                       
|                       
|                       
|Operating (loss) income |  |                                      | (417.8   | )         |  |       | 0.3  |   |  |   | (417.5   | )
|                       
|                       
|                       
|                       
|Net (loss)              |  |                                      | (1,163.0 | )         |  |       | (0.3 | ) |  |   | (1,163.3 | )

|                 |  |                                      |          |           |  |       |      |   |  |   |          |  
|---------------- |  | ------------------------------------ | -------- | --------- |  | ----- | ---- | - |  | - | -------- | -
|                 |  | Nine Months Ended September 30, 2001
|                 |  | (in millions)                       
|                 |  |                                     
|                 |  | New                                  |          | NTL       |  |       |      |  
|                 |  | NTL                                  |          | Australia |  | Total
|                 |  |                                      |          |           |  |      
|Revenues         |  | $                                    | 2,363.4  |           |  | $     | 45.5 |   |  | $ | 2,408.9  |  
|                
|                
|                
|                
|Operating (loss) |  |                                      | (1,566.7 | )         |  |       | (5.9 | ) |  |   | (1,572.6 | )
|                
|                
|                
|                
|Net (loss)       |  |                                      | (2,444.1 | )         |  |       | (3.1 | ) |  |   | (2,447.2 | )

For further information on New NTL, see the Quarterly Report on Form 10-Q of
NTL Communications Corp. for the quarterly period ended September 30, 2002.

Note E  Recent Accounting Pronouncements

On July 30, 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 146, Accounting for
Costs Associated with Exit or Disposal Activities. SFAS No. 146 replaces
Emerging Issues Task Force Issue No. 94-3 Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring). SFAS No. 146 requires that a
liability for costs associated with an exit or disposal activity is recognized
when the liability is incurred. Under Issue No. 94-3, a liability for an exit
cost as defined is recognized at the date of a commitment to an exit or
disposal plan. SFAS No. 146 is effective for exit or disposal activities that
are initiated after December 31, 2002. The adoption of this standard is not
expected to have a significant effect on the results of operations, financial
condition or cash flows of the Company.

In April 2002, the FASB issued SFAS No. 145, Recession of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
which is effective for the Company on January 1, 2003. The adoption of SFAS
No. 145 will require any gain or loss recognized on the extinguishment of debt
to be classified as income or loss from continuing operations. Prior to SFAS
No. 145, gain or loss from the extinguishment of debt was classified as an
extraordinary item.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment
or Disposal of Long-Lived Assets, effective for the Company on January 1,
2002. This Statement superceded SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and other
related accounting guidance. The adoption of this new standard had no
significant effect on the results of operations, financial condition or cash
flows of the Company, except that it required the Company to treat NTL
Australia as a discontinued operation beginning in the first quarter of 2002.

22



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note E  Recent Accounting Pronouncements (continued)

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, effective for the Company on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible fixed assets and the associated asset retirement
costs. The Company is in the process of evaluating the financial statement
impact of the adoption of SFAS No. 143.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead, these
assets must be reviewed annually (or more frequently under certain conditions)
for impairment in accordance with this statement. This impairment test uses a
fair value approach rather than the undiscounted cash flow approach previously
required by SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of. The Company adopted SFAS No. 142
on January 1, 2002. Primarily due to the significant impairment charge that the
Company recorded in 2001, the adoption of this new standard did not have a
significant effect on the results of operations, financial condition or cash
flows of the Company.

Upon the adoption of SFAS No. 142, the Company performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. The
Company reclassified the carrying value of workforce in place included in other
intangibles to goodwill. The Company determined that license acquisition costs
and customer lists should continue to be classified separate from goodwill. The
Company determined that license acquisition costs would no longer be subject to
amortization since they are deemed to have an indefinite useful life. The
Company also determined that no changes in the remaining useful lives of the
customer lists were required.

The Company also performed an evaluation for impairment of its goodwill and
license acquisition costs as of January 1, 2002 and determined that no
impairment charge was required. The Companys next evaluation of impairment
will be the annual test as of October 1, 2002.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2001 is as follows: $63.9 million in 2002, $63.9
million in 2003, $34.7 million in 2004, $3.1 million in 2005 and $3.1 million
in 2006.

The following table shows the Companys loss from continuing operations and its
basic and diluted loss from continuing operations per share as adjusted for the
adoption of SFAS No. 142, had SFAS No. 142 been in effect on January 1, 2001
(unaudited) (in millions, except per share data).

|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |       |  
|------------------------------------------------------------------ | ------------------------------ | - | ------------------ | ----- | ----------------- | - | ------ | ----- | ---- | - | ------ | ----- | - | - | ------ | ----- | -
|                                                                   |                                |   | Three Months Ended |       | Nine Months Ended
|                                                                   |                                |   | September 30,      |       | September 30,    
|                                                                   |                                |   |                    |       |                  
|                                                                   |                                |   | 2002               |       | 2001              |   | 2002   |       | 2001
|                                                                   |                                |   |                    |       |                   |   |        |       |     
|(Loss) from continuing operations  as reported                    |                                | $ | (169.7             | )     |                   | $ | (221.3 | )     |      | $ | (456.1 | )     |   | $ | (656.4 | )    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Amortization of:                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Goodwill                       |   |                    |      |                   |   |        | 81.9  |      |   |        |      |   |   |        | 253.1 |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Other                          |   |                    |      |                   |   |        | 0.5   |      |   |        |      |   |   |        | 1.1   |  
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                   |                                |   |                   |       |                   |   | 82.4   |       |      |   |       |       |   |   | 254.2  |      
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|(Loss) from continuing operations  as adjusted                    |                                | $ | (169.7             | )     |                   | $ | (138.9 | )     |      | $ | (456.1 | )     |   | $ | (402.2 | )    
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|Basic and diluted net (loss) from continuing
operations per share: |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | As reported                    |   | $                  | (0.62 | )                 |   | $      | (1.12 | )    |   | $      | (2.17 | ) |   | $      | (3.21 | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Amortization expense reduction |   |                    |      |                   |   |        | 0.30  |      |   |        |      |   |   |        | 0.92  |  
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                   | As adjusted                    |   | $                  | (0.62 | )                 |   | $      | (0.82 | )    |   | $      | (2.17 | ) |   | $      | (2.29 | )
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      

23



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note F  Fixed Assets

Fixed assets consist of:

|                         |  |               |         |              |  |   |         |  
|------------------------ |  | ------------- | ------- | ------------ |  | - | ------- | -
|                         |  | September 30, |         | December 31,
|                         |  | 2002          |         | 2001        
|                         |  |               |         |             
|                         |  | (unaudited)  
|                         |  | (in millions)
|Operating equipment      |  | $             | 1,950.5 |              |  | $ | 1,691.4 |  
|                        
|                        
|                        
|                        
|Other equipment          |  |               | 77.0    |              |  |   | 75.2    |  
|                        
|                        
|                        
|                        
|Construction-in-progress |  |               | 40.5    |              |  |   | 2.8     |  
|                         |  |               |         |              |  |   |         |  
|                         |  |               | 2,068.0 |              |  |   | 1,769.4 |  
|                        
|                        
|                        
|                        
|Accumulated depreciation |  |               | (454.7  | )            |  |   | (271.6  | )
|                         |  |               |         |              |  |   |         |  
|                         |  | $             | 1,613.3 |              |  | $ | 1,497.8 |  
|                         |  |               |         |              |  |   |         |  

Note G  Intangible Assets

Intangible assets consist of:

|                                                                                  |  |               |         |              |  |   |         | 
|--------------------------------------------------------------------------------- |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                                                                  |  | September 30, |         | December 31,
|                                                                                  |  | 2002          |         | 2001        
|                                                                                  |  |               |         |             
|                                                                                  |  | (unaudited)  
|                                                                                  |  | (in millions)
|Intangible assets not subject to amortization:                                    |  |               |         |              |  |   |         | 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Goodwill                                                                          |  | $             | 1,084.1 |              |  | $ | 978.4   | 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Intangible assets subject to amortization:                                        |  |               |         |              |  |   |         | 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Customer lists, net of accumulated amortization of $146.0 (2002)
and $91.1 (2001) |  |               | 73.6    |              |  |   | 104.1   | 
|                                                                                  |  |               |         |              |  |   |         | 
|                                                                                  |  | $             | 1,157.7 |              |  | $ | 1,082.5 | 
|                                                                                  |  |               |         |              |  |   |         | 

Note H  Investments in and Loans to Affiliates

The Company has investments in various companies and joint ventures which are
accounted for under either the equity method or the cost method. The Companys
significant equity investments include its 27% interest in Noos S.A., the
market leading French broadband company, which offers analog and digital cable
television, high speed Internet and telephone services, its 34.01% interest in
Svenska Bredbandsbolaget (B2), a company based in Sweden, which provides
always on, low cost access to a high-capacity broadband network that provides
transmission, both to and from the customer, at the same speed and at the same
time, and its 50% interest in eKabel InvestCo, which owns 65% of iesy Hessen
GmbH (iesy), the largest cable television network in the German province of
Hessen.

The companies in which we hold minority investments may require additional
financing. There can be no assurance that iesy will meet the conditions
precedent to access additional funds under its credit facility or that it will
be in compliance with the covenants under its debt agreements. The failure of
iesy to obtain required funding or a default entitling the lenders to
accelerate repayment of iesys borrowings would adversely affect the value of
NTLs investment in iesy. In addition iesy has recently retained advisors to
assist it in a restructuring of its outstanding indebtedness. There can be no
assurance that iesy will successfully achieve a restructuring. If a
restructuring is not successfully achieved, it will likely have a negative
impact on the value of NTLs investment in iesy.

On April 15, 2002, a funding request for approximately $20 million was received
by NTL under the terms of the investment agreement relating to NTLs investment
in B2. NTL informed B2 and the other principal investors that it was not in a
position to comply with this request for funding. The B2 investment agreement
provides that if NTL fails to provide such funding, it might be sued for
non-payment and arguably could lose certain rights under the B2 shareholders
agreement. Pursuant to the applicable documents, if this occurs the majority
remaining shareholders may also elect to terminate the B2 shareholders
agreements with respect to NTL and exercise a contractual right to acquire on a
pro rata basis NTLs interest in B2 at 25% of fair market value. If the
remaining shareholders were able and elected to exercise these rights, NTL
could be forced to sell its stake in B2 at a loss. On

24



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note H  Investments in and Loans to Affiliates (continued)

October 4, 2002, NTL filed a motion with the Bankruptcy Court to reject the B2
investment agreement and shareholders agreements under section 365 of the
Bankruptcy Code, and the Bankruptcy Court subsequently authorized NTLs
rejection of the agreements. On November 8, 2002, B2 and the remaining
shareholders filed proofs of claim with the Bankruptcy Court asserting their
right to recover: (1) more than $20 million from NTL in respect of the unpaid
funding request, (2) unspecified damages for NTLs failure to perform under the
relevant agreements, and (3) unspecified costs and expenses incurred in the
exercise of their remedies under the agreements. Additionally, B2 and the
remaining shareholders reserved their rights to avail themselves of any
remedies under the investment and shareholders agreements and to take any
actions to acquire NTLs interest in B2, as described above. NTL intends to
object to the proofs of claim filed by B2 and the remaining shareholders. The
Bankruptcy Court will adjudicate the claims of B2 and the remaining
shareholders and NTLs defenses thereto. Upon consummation of the Plan, NTL
Euroco will succeed to the rights and obligations of NTL described in this
paragraph.

Premium TV Limited, a wholly-owned subsidiary of NTL (Delaware), Inc., is
obliged to provide funding of up to approximately £19.0 million ($29.8 million)
to fund various of its joint venture interests. Of this amount, the payment of
approximately £4.0 million ($6.3 million) has been guaranteed by NTL
(Delaware), Inc. If Premium TV Limited fails to provide its committed funding
under the relevant shareholder arrangements relating to these joint ventures,
Premium TV Limited and, in respect of the guaranteed amounts, NTL (Delaware),
Inc., may be sued for non-payment. As a result of the recapitalization process,
the relevant joint venture partners may assert that they can compulsorily
acquire Premium TV Limiteds interest in the relevant joint venture at a third
party appraisal valuation. Premium TV Limited is currently in discussions with
certain of these joint venture partners with a view to restructuring the
relevant joint ventures. In the event that these discussions do not reach a
resolution acceptable to Premium TV Limited, Premium TV Limited may seek to
discontinue these joint ventures and terminate their activities. NTL believes,
however, that it has various defenses and protections under the Bankruptcy Code
against such actions and intends to enforce vigorously its rights and
protections.

On September 24, 2002, Premium TV Limited, NTL (Delaware), Inc. and NTL
Incorporated agreed to vary the terms of the long-term joint venture (referred
to as the Football League Joint Venture) between Premium TV Limited and the
Football League Limited. Under the terms of the variation, upon the payment of
arrears of rights fees by Premium TV Limited, the Football League Limited
agreed to release Premium TV Limited from its obligation to fund the payment of
any further rights fees to the Football League Limiteds member teams and its
obligation to provide working capital funding to the Football League Joint
Venture. The Football League Limited also agreed to release NTL (Delaware),
Inc. from its guarantee of Premium TV Limiteds obligations and to release NTL
Incorporated from the related undertaking. In return, Premium TV Limited
agreed to waive repayment of loan capital by the Football League Joint Venture
and to provide certain ongoing services to the Football League Joint Venture
free of charge for an initial period. NTL (Delaware), Inc. deposited £10.33
million into a designated single purpose account for use by Premium TV Limited
to finance the provision of such services. Premium TV Limited and the Football
League Limited also agreed to new terms relating to the distribution of
revenues generated by the Football League Joint Venture. Following
consummation of the Plan, Premium TV Limited will be an asset of NTL Euroco.

On November 12, 2002, three of NTL Incorporateds wholly owned subsidiaries
entered into a support agreement with the other limited partners of eKabel
L.P. (the investment partnership through which NTL holds its equity stake in
iesy), an informal committee holding in excess of a majority of the principal
amount of the high-yield bonds of iesy and the NTL employees who have been
seconded to work for iesy. At this time, the iesy companies are not parties to
the support agreement, however the support agreement permits them to become
parties at any time. The support agreement contemplates an in-or out-of-court
restructuring of iesy Hessen GmbH and its subsidiaries. If the iesy
restructuring is completed as contemplated by the support agreement, Brigadoon
Ventures (one of the NTL subsidiaries) will receive a cash facilitation fee for
its cooperation in the iesy restructuring (not in respect of its equity stake
in iesy) of approximately $1.3 million, less its pro rata share of expenses
incurred at the eKabel partnership level. If the iesy restructuring is
completed and the cash facilitation fee is paid to Brigadoon Ventures, NTL
would no longer have any equity stake or other investment in iesy and would
receive no consideration for its equity stake in iesy. The support agreement
imposes certain obligations on the parties, including restricting transfer of
interests in iesy during the process, terminating the existing consulting
agreement between NTL and iesy, and reimbursing NTL for the secondment of NTL
employees. If the support agreement is terminated or the iesy restructuring is
not otherwise completed as contemplated by the support agreement, it is likely
NTL Europe would receive little, if any, value for its equity stake in the iesy
companies. Share of losses from equity investments includes a
non-cash write-down of the investment in iesy of $40.6 million
in 2002.

25



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note H  Investments in and Loans to Affiliates (continued)

NTL Incorporated has also guaranteed the obligations of one of its subsidiaries
to provide funding of up to approximately £4.2 million ($6.6 million) to a
joint venture whose business is the provision of programming content. If the
relevant subsidiary fails to provide such funding, under the shareholder
arrangements relating to this joint venture, such subsidiary may be sued for
damages. In addition, under the shareholder arrangements relating to this joint
venture, the relevant joint venture partner may have the option to compulsorily
acquire the Companys indirect interest in the relevant joint venture at 70% of
fair market value, resulting in the Company selling its indirect interest at a
potential loss. The Company believes that it has various defenses and
protections under the United States Bankruptcy Code against such actions and
intends to enforce vigorously its rights and protections. The Company intends
to negotiate with its joint venture partner to address these issues. There can
be no guaranty that these negotiations will be successful and that the Company
will be able to retain its current interest in this joint venture company.

The Companys investments in and loans to affiliates are as follows:

|                         |  |                       |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|------------------------ |  | --------------------- | ----- | ----------------- |  | --------- | ---- | ------- |  |  | ----- | - |  | - | ----- | 
|                         |  | September 30, 2002    |       | December 31, 2001
|                         |  |                       |       |                  
|                         |  | Ownership             |       | Balance           |  | Ownership |      | Balance
|                         |  | (unaudited)          
|                         |  | (dollars in millions)
|Noos                     |  |                       | 27.00 | %                 |  | $         | (0.7 | )       |  |  | 27.00 | % |  | $ | 47.0  | 
|                        
|                        
|                        
|                        
|B2                       |  |                       | 34.01 | %                 |  |           | 72.0 |         |  |  | 34.01 | % |  |   | 92.5  | 
|                        
|                        
|                        
|                        
|iesy                     |  |                       | 32.50 | %                 |  |           |     |         |  |  | 32.50 | % |  |   | 73.0  | 
|                        
|                        
|                        
|                        
|Others                   |  |                       |       |                   |  |           | (3.3 | )       |  |  |       |   |  |   | 48.3  | 
|                         |  |                       |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|Total equity investments |  |                       |       |                   |  |           | 68.0 |         |  |  |       |   |  |   | 260.8 | 
|                        
|                        
|                        
|                        
|Total cost investments   |  |                       |       |                   |  |           | 7.7  |         |  |  |       |   |  |   | 7.0   | 
|                         |  |                       |       |                   |  |           |      |         |  |  |       |   |  |   |       | 
|Total                    |  |                       |       |                   |  | $         | 75.7 |         |  |  |       |   |  | $ | 267.8 | 
|                         |  |                       |       |                   |  |           |      |         |  |  |       |   |  |   |       | 

A summary of combined financial information as reported by the Companys equity
investees is set forth below:

|                                           |  |               |         |              |  |   |         | 
|------------------------------------------ |  | ------------- | ------- | ------------ |  | - | ------- | 
|                                           |  | September 30, |         | December 31,
|                                           |  | 2002          |         | 2001        
|                                           |  |               |         |             
|                                           |  | (unaudited)  
|                                           |  | (in millions)
|Current assets                             |  | $             | 394.6   |              |  | $ | 454.4   | 
|                                          
|                                          
|                                          
|                                          
|Fixed assets, net                          |  |               | 1,102.8 |              |  |   | 908.1   | 
|                                          
|                                          
|                                          
|                                          
|Other assets                               |  |               | 1,298.0 |              |  |   | 2,688.5 | 
|                                           |  |               |         |              |  |   |         | 
|Total assets                               |  | $             | 2,795.4 |              |  | $ | 4,051.0 | 
|                                           |  |               |         |              |  |   |         | 
|Current liabilities                        |  | $             | 416.0   |              |  | $ | 309.1   | 
|                                          
|                                          
|                                          
|                                          
|Non current liabilities                    |  |               | 1,666.5 |              |  |   | 1,403.6 | 
|                                          
|                                          
|                                          
|                                          
|Total shareholders equity                 |  |               | 712.9   |              |  |   | 2,338.3 | 
|                                           |  |               |         |              |  |   |         | 
|Total liabilities and shareholders equity |  | $             | 2,795.4 |              |  | $ | 4,051.0 | 
|                                           |  |               |         |              |  |   |         | 

|                 |  |                                 |        |      |  |   |        |  
|---------------- |  | ------------------------------- | ------ | ---- |  | - | ------ | -
|                 |  | Nine Months Ended September 30,
|                 |  |                                
|                 |  | 2002                            |        | 2001
|                 |  |                                 |        |     
|                 |  | (unaudited)                    
|                 |  | (in millions)                  
|Revenues         |  | $                               | 289.1  |      |  | $ | 274.9  |  
|                
|                
|                
|                
|Operating (loss) |  |                                 | (262.5 | )    |  |   | (372.2 | )
|                
|                
|                
|                
|Net (loss)       |  |                                 | (309.7 | )    |  |   | (433.2 | )

26



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note I Liabilities Subject to Compromise

Liabilities subject to compromise consist of the following:

|                                                                  |               |                                                    |         |  |               |         | 
|----------------------------------------------------------------- | ------------- | -------------------------------------------------- | ------- |  | ------------- | ------- | 
|                                                                  |               |                                                    |         |  | September 30,
|                                                                  |               |                                                    |         |  | 2002         
|                                                                  |               |                                                    |         |  |              
|                                                                  |               |                                                    |         |  | (unaudited)  
|                                                                  |               |                                                    |         |  | (in millions)
|Accounts payable                                                  |               | $                                                  | 0.4     | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Interest payable                                                  |               |                                                    | 30.4    | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Dividends payable                                                 |               |                                                    | 109.9   | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Deferred purchase price payable                                   |               |                                                    | 3.2     | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Accrued expenses                                                  |               |                                                    | 1.3     | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Redeemable preferred stock
Cumulative Convertible Preferred Stock |               |                                                    | 2,077.3 | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |               | Variable Coupon Redeemable Preferred Stock         |         |  | 484.2         |        
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |               | 6.5% Redeemable Preferred Stock                    |         |  | 96.8          |        
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |               | 13% Senior Redeemable Exchangeable Preferred Stock |         |  | 193.4         |        
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|Long term debt
NTL Incorporated:                                  |               |                                                    |         | 
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |               | 5 3/4% Convertible Subordinated Notes              |         |  | 100.0         |        
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  | NTL Delaware: |                                                    |         |  |              
|                                                                 
|                                                                 
|                                                                 
|                                                                 
|                                                                  |               | 5 3/4% Convertible Subordinated Notes              |         |  | 1,200.0       |        
|                                                                  |               |                                                    |         | 
|                                                                  |               |                                                    | Total   |  | $             | 4,296.9 | 
|                                                                  |               |                                                    |         | 

Note J  Long-Term Debt

Long-term debt, exclusive of amounts subject to compromise, consists of:

|                     |                                       |   |               |         |              |   |         |         | 
|-------------------- | ------------------------------------- | - | ------------- | ------- | ------------ | - | ------- | ------- | 
|                     |                                       |   | September 30, |         | December 31,
|                     |                                       |   | 2002          |         | 2001        
|                     |                                       |   |               |         |             
|                     |                                       |   | (unaudited)  
|                     |                                       |   | (in millions)
|NTL Incorporated:    |                                       |   |               |         |              |   |         |        
|                    
|                    
|                    
|                    
|                     | 5 3/4% Convertible Subordinated Notes |   | $             |        |              |   | $       | 100.0   | 
|                    
|                    
|                    
|                    
|NTL Delaware:        |                                       |   |               |         |              |   |         |        
|                    
|                    
|                    
|                    
|                     | 5 3/4% Convertible Subordinated Notes |   |               |        |              |   |         | 1,200.0 | 
|                    
|                    
|                    
|                    
|Cablecom:            |                                       |   |               |         |              |   |         |        
|                    
|                    
|                    
|                    
|                     | Term Loan Facility                    |   |               | 1,829.5 |              |   |         | 1,626.8 | 
|                    
|                    
|                    
|                    
|                     | Revolving Facility                    |   |               | 714.9   |              |   |         | 527.2   | 
|                    
|                    
|                    
|                    
|                     | Other                                 |   |               | 5.7     |              |   |         | 6.2     | 
|                     |                                       |   |               |         |              |   |         |        
|                     |                                       |   | 2,550.1       |         |              |   | 3,460.2 |        
|                    
|                    
|                    
|                    
|Less current portion |                                       |   | 2,550.1       |         |              |   | 3,460.2 |        
|                     |                                       |   |               |         |              |   |         |        
|                     |                                       | $ |              |         |              | $ |        |        
|                     |                                       |   |               |         |              |   |         |        

See Note C for discussion of the events of default and uncertainties about
compliance with the terms and conditions of the Companys debt. The holders of
the debt have the right to accelerate repayment, or may have such right, which
has caused all of the Companys long-term debt to be classified as current. The
automatic stay of Section 362 of the United States Bankruptcy Code prevents the
holders of such debt from seeking to enforce their collection rights under the
indentures, except within the context of the Chapter 11 cases, and even then
only with the prior approval of the Bankruptcy Court. However, NTL has received
letters from the agents for the lenders under the UK credit facilities
reserving such lenders rights to accelerate repayment of the facilities and to
enforce the security granted in respect of the facilities on account of the
defaults thereunder, actions which would not be prohibited by the automatic
stay.

27



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note J  Long-Term Debt (continued)

The effective interest rates on the Companys variable interest rate debt were
as follows:

|                            |                          |  |               |       |              |  |  |      |  
|--------------------------- | ------------------------ |  | ------------- | ----- | ------------ |  |  | ---- | -
|                            |                          |  | September 30, |       | December 31,
|                            |                          |  | 2002          |       | 2001        
|                            |                          |  |               |       |             
|Cablecom:                   |                          |  |               |       |              |  |  |     
|                           
|                           
|                           
|                           
|                            | Term Loan Facility       |  |               | 3.51  | %            |  |  | 5.27 | %
|                           
|                           
|                           
|                           
|                            | Revolving Facility       |  |               | 3.71  | %            |  |  | 5.49 | %
|                           
|                           
|                           
|                           
|NTL Communications Limited: |                          |  |               |       |              |  |  |     
|                           
|                           
|                           
|                           
|                            | Senior Credit
Facility   |  |               | 6.26  | %            |  |  | 6.73 | %
|                           
|                           
|                           
|                           
|                            | Term Facility            |  |               | 7.76  | %            |  |  | 8.06 | %
|                           
|                           
|                           
|                           
|                            | Working Capital Facility |  |               | 11.26 | %            |  |  | 9.57 | %

On April 30, 2002, the Cablecom Term Loan Facility and Revolving Facility were
restated. In May 2002, Cablecom borrowed an additional CHF 180.0 million
($122.0 million) under the Revolving Facility. The maturity date for both
facilities was changed to April 30, 2003 in the restatement. The interest and
commitment fee provisions were not changed. The Revolving Facility has been
capped at its utilized amount of CHF 1,055.0 million although the availability
may be increased with the consent of the requisite majority of the lenders
under that facility.

Note K  Redeemable Preferred Stock

The changes in the number of shares of Redeemable Preferred Stock were as
follows (unaudited):

|                                                           |  |     |         |          |  |      |        |             |  |   |        |  |  |   |           | 
|---------------------------------------------------------- |  | --- | ------- | -------- |  | ---- | ------ | ----------- |  | - | ------ |  |  | - | --------- | 
|                                                           |  | 13% |         | Variable |  | 6.5% |        | Convertible
|                                                           |  |     |         |          |  |      |        |            
|Shares at December 31, 2001                                |  |     | 184,000 |          |  |      | 48,000 |             |  |   | 12,000 |  |  |   | 1,850,000 | 
|                                                          
|                                                          
|                                                          
|                                                          
|Issued for dividends                                       |  |     |        |          |  |      |       |             |  |   |       |  |  |   |          | 
|                                                           |  |     |         |          |  |      |        |             |  |   |        |  |  |   |           | 
|Shares at September 30, 2002                               |  |     | 184,000 |          |  |      | 48,000 |             |  |   | 12,000 |  |  |   | 1,850,000 | 
|                                                           |  |     |         |          |  |      |        |             |  |   |        |  |  |   |           | 
|Liquidation preference at
September 30, 2002 (in
millions) |  | $   | 205.6   |          |  | $    | 502.5  |             |  | $ | 132.3  |  |  | $ | 2,127.1   | 
|                                                           |  |     |         |          |  |      |        |             |  |   |        |  |  |   |           | 

Note L  Other Charges including Restructuring Charges

Other charges of $31.9 million in 2002 include asset impairment charges of
$29.1 million and costs incurred for information technology integration and for
business rationalization consulting of $2.8 million. Other charges of $3.3
million in 2001 were for information technology integration and for business
rationalization consulting.

The Company recorded restructuring charges in the fourth quarter of 2001 as a
result of actions to reorganize, re-size and reduce operating costs and create
greater efficiency in various areas of the Company. These charges included
employee severance and related costs for approximately 200 employees to be
terminated, of which approximately 41 employees were still employed by the
Company as of September 30, 2002.

28



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note L  Other Charges including Restructuring Charges (continued)

The following table summarizes the restructuring charges incurred and utilized
in 2002 and 2001:

|                            |  |               |      |  
|--------------------------- |  | ------------- | ---- | -
|                            |  | Employee     
|                            |  | Severance    
|                            |  | and Related  
|                            |  | Costs        
|                            |  |              
|                            |  | (in millions)
|Balance, December 31, 2001  |  | $             | 6.8  |  
|                           
|                           
|                           
|                           
|Charged to expense          |  |               |     |  
|                           
|                           
|                           
|                           
|Utilized                    |  |               | (3.8 | )
|                            |  |               |      |  
|Balance, September 30, 2002 |  | $             | 3.0  |  
|                            |  |               |      |  

Note M  Comprehensive Loss

The Companys comprehensive loss for the three months ended September 30, 2002
and 2001 was $355.0 million and $872.0 million, respectively. The Companys
comprehensive loss for the nine months ended September 30, 2002 and 2001 was
$1,239.3 million and $3,285.4 million, respectively.

Note N  Commitments and Contingent Liabilities

At September 30, 2002, the Company was committed to pay approximately $1,529.5
million (which includes $1,374.3 million for NTL Communications Corp. and
subsidiaries)for equipment and services and for investments in and loans to
affiliates. This amount includes approximately $1,111.2 million(which includes
$1,050.5 million for NTL Communications Corp. and subsidiaries)for operations
and maintenance contracts and other commitments from July 1, 2003 to 2013.

The Company has agreed to provide funds to its unconsolidated affiliates
generally if and when requested to do so and only upon the satisfaction of
certain conditions. The estimated aggregate amount as of September 30, 2002 was
$46.5 million. These unconsolidated affiliates include the media partnerships
with the Football League and with various UK football clubs for Internet
marketing and sponsorships. The Companys wholly-owned indirect subsidiary,
Premium TV Limited, has entered into these football related partnerships.

NTL Incorporated and certain of its officers have been named as defendants in a
number of purported securities class action lawsuits. The complaints in those
cases generally allege that the defendants failed to accurately
disclose NTLs financial
condition, finances and future prospects in press releases and other
communications with investors prior to filing its Chapter 11 case in federal
court. NTL does not know of any facts that would support these allegations,
and the defendants intend to defend the lawsuits vigorously. The cases have been
consolidated for all purposes before the U.S. District Court for the Southern
District of New York. As a result of the voluntary filing of a petition under
Chapter 11 of the U.S. Bankruptcy code, the cases may not currently proceed
against the Company itself. Moreover, the Plan provides for a discharge and
for releases that will effectively bar the suits from continuing against the
Company following consummation. However, the executives named in the suits
continue to be defendants in the suits and will continue as such following
consummation.

Cablecom is
involved in proceedings before the Swiss Price Regulator who is attempting to
regulate the prices charged for basic television service provided by Cablecom.
Cablecom is currently in negotiations with the Swiss Price Regulator with
respect to a possible settlement of this matter. There can be no guarantee
that these negotiations will be successful. In the event that Cablecom is
unable to reach an acceptable settlement, the Swiss Price Regulator may choose
to issue a final order requiring Cablecom to lower the prices it currently
charges for basic television service. Cablecom believes that it has a number
of alternatives available to it to prevent or delay such a price decrease, and
intends to enforce vigorously these alternatives.

National Transcommunications Limited, a subsidiary of NTL Incorporated, has
been in discussions with Vodafone Limited relating to the pricing of
transmission services which National Transcommunications Limited has been
providing to Vodafone Limited. Thus far the parties have been unable to agree
on a settlement. Vodafone Limited has commenced proceedings seeking recovery
of amounts which they allege are excess annual rent paid for the services, and
a reduction in the continuing annual rental for the duration of the
transmission contract. It is possible that if such a claim were successful, it
could have an adverse effect on NTLs financial position. NTL has instructed
solicitors to vigorously defend the claim and believes that, in the event of
litigation, it would have a good defense to any claim.

The Company is involved in certain other disputes and litigation arising in the
ordinary course of its business. None of these matters are expected to have a
material adverse effect on the Companys financial position, results of
operations or cash flows.

29



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization

The following condensed consolidating financial statements of the Company as of
September 30, 2002 and December 31, 2001 and for the three and nine months
ended September 30, 2002 have been provided pursuant to AICPA Statement of
Position 90-7, Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code. NTL Incorporateds subsidiaries, NTL (Delaware), Inc., NTL
Communications Corp., Diamond Cable Communications Limited, Diamond Holdings
Limited and Communications Cable Funding Corp., are included in Entities in
Reorganization. All other wholly owned direct and indirect subsidiaries of NTL
Incorporated are included in Entities Not in Reorganization.

|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |          |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------ | -------------- | ------------------------------------ | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ------- |  | - | -------- | -------- | -
|(in millions)                                                                 
|(unaudited)                                                                   
|                                                                              
|                                                                               |                                                              |                | Nine Months Ended September 30, 2002
|                                                                               |                                                              |                |                                     
|                                                                               |                                                              |                |                                      |                |    |             | Entities Not |              |   |   |         |         |  |   |         
|                                                                               |                                                              |                | Entities in                          |                | in |             |              |              |   |   |         |         | 
|Statements of Operations                                                       |                                                              | Reorganization |                                      | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                              |                |                                      |                |    |             |              |             
|Revenue                                                                        |                                                              | $              |                                     |                |    | $           | 348.3        |              |   |   |         |         |  | $ | 348.3    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Costs and expenses                                                             |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                              |                |                                     |                |    |             | 170.6        |              |   |   |         |         |  |   | 170.6    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Selling, general and administrative expenses                                   |                                                              |                | 3.6                                  |                |    |             | 117.0        |              |   |   |         |         |  |   | 120.6    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other charges                                                                  |                                                              |                |                                     |                |    |             | 31.9         |              |   |   |         |         |  |   | 31.9     |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Corporate expenses                                                             |                                                              |                | 14.4                                 |                |    |             |             |              |   |   |         |         |  |   | 14.4     |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Depreciation                                                                   |                                                              |                | 0.7                                  |                |    |             | 148.2        |              |   |   |         |         |  |   | 148.9    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Amortization                                                                   |                                                              |                | 7.9                                  |                |    |             | 61.6         |              |   |   |         |         |  |   | 69.5     |         
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               |                                                              |                | 26.6                                 |                |    |             | 529.3        |              |   |   |         |         |  |   | 555.9    |         
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|Operating loss                                                                 |                                                              |                | (26.6                                | )              |    |             | (181.0       | )            |   |   |         |         |  |   | (207.6   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other income (expense)                                                         |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest income and other, net                                                 |                                                              |                | 16.4                                 |                |    |             | 9.8          |              |   | $ | (8.7    | )       |  |   | 17.5     |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest expense (contractual interest of $167.3
(2002))                       |                                                              |                | (27.8                                | )              |    |             | (105.4       | )            |   |   |        |         |  |   | (133.2   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Share of (losses) from equity investments                                      |                                                              |                | (361.8                               | )              |    |             | (16.2        | )            |   |   | 209.9   |         |  |   | (168.1   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Foreign currency transaction gains                                             |                                                              |                | 5.3                                  |                |    |             | 1.5          |              |   |   |        |         |  |   | 6.8      |         
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                              |                | (394.5                               | )              |    |             | (291.3       | )            |   |   | 201.2   |         |  |   | (484.6   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Recapitalization items, net                                                    |                                                              |                | (7.9                                 | )              |    |             | (3.7         | )            |   |   |        |         |  |   | (11.6    | )       
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before income taxes and discontinued
operations                         |                                                              |                | (402.4                               | )              |    |             | (295.0       | )            |   |   | 201.2   |         |  |   | (496.2   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income tax (expense) benefit                                                   |                                                              |                | (2.3                                 | )              |    |             | 42.4         |              |   |   |        |         |  |   | 40.1     |         
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from continuing operations                                              |                                                              |                | (404.7                               | )              |    |             | (252.6       | )            |   |   | 201.2   |         |  |   | (456.1   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Discontinued operations:                                                       |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations, net of taxes            |                |                                      | (1,309.7       | )  |             |              | (1,039.4     | ) |   |         | 1,185.8 |  |   |          | (1,163.3 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) gain on sale of discontinued operations,
net of taxes |                |                                      | (36.0          | )  |             |              | 44.6         |   |   |         |        |  |   |          | 8.6      |  
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from discontinued operations                                            |                                                              |                | (1,345.7                             | )              |    |             | (994.8       | )            |   |   | 1,185.8 |         |  |   | (1,154.7 | )       
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|Net (loss)                                                                     |                                                              | $              | (1,750.4                             | )              |    | $           | (1,247.4     | )            |   | $ | 1,387.0 |         |  | $ | (1,610.8 | )       
|                                                                               |                                                              |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         

30



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization (continued)

|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |          |  
|------------------------------------------------------------------------------ | ----------------------------------------------------- | -------------- | ------------------------------------ | -------------- | -- | ----------- | ------------ | ------------ | - | - | ------- | ------- |  | - | -------- | -------- | -
|(in millions)                                                                 
|(unaudited)                                                                   
|                                                                              
|                                                                               |                                                       |                | Nine Months Ended September 30, 2001
|                                                                               |                                                       |                |                                     
|                                                                               |                                                       |                |                                      |                |    |             | Entities Not |              |   |   |         |         |  |   |         
|                                                                               |                                                       |                | Entities in                          |                | in |             |              |              |   |   |         |         | 
|Statements of Operations                                                       |                                                       | Reorganization |                                      | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                       |                |                                      |                |    |             |              |             
|Revenue                                                                        |                                                       | $              |                                     |                |    | $           | 313.1        |              |   |   |         |         |  | $ | 313.1    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Costs and expenses                                                             |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                       |                |                                     |                |    |             | 126.6        |              |   |   |         |         |  |   | 126.6    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Selling, general and administrative expenses                                   |                                                       |                |                                     |                |    |             | 134.5        |              |   |   |         |         |  |   | 134.5    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other charges                                                                  |                                                       |                |                                     |                |    |             | 3.3          |              |   |   |         |         |  |   | 3.3      |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Corporate expenses                                                             |                                                       |                | 33.0                                 |                |    |             | 0.1          |              |   |   |         |         |  |   | 33.1     |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Depreciation                                                                   |                                                       |                | 2.0                                  |                |    |             | 119.5        |              |   |   |         |         |  |   | 121.5    |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Amortization                                                                   |                                                       |                | 4.8                                  |                |    |             | 293.6        |              |   |   |         |         |  |   | 298.4    |         
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                               |                                                       |                | 39.8                                 |                |    |             | 677.6        |              |   |   |         |         |  |   | 717.4    |         
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|Operating loss                                                                 |                                                       |                | (39.8                                | )              |    |             | (364.5       | )            |   |   |         |         |  |   | (404.3   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other income (expense)                                                         |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest income and other, net                                                 |                                                       |                | 12.3                                 |                |    |             | 3.0          |              |   | $ | (5.5    | )       |  |   | 9.8      |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest expense                                                               |                                                       |                | (53.8                                | )              |    |             | (94.0        | )            |   |   | 4.5     |         |  |   | (143.3   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Share of (losses) from equity investments                                      |                                                       |                | (565.8                               | )              |    |             | (32.1        | )            |   |   | 456.1   |         |  |   | (141.8   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Foreign currency transaction (losses)                                          |                                                       |                | (11.4                                | )              |    |             | (4.0         | )            |   |   |        |         |  |   | (15.4    | )       
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                       |                | (658.5                               | )              |    |             | (491.6       | )            |   |   | 455.1   |         |  |   | (695.0   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Recapitalization items, net                                                    |                                                       |                |                                     |                |    |             |             |              |   |   |        |         |  |   |         |         
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) before income taxes and discontinued
operations                         |                                                       |                | (658.5                               | )              |    |             | (491.6       | )            |   |   | 455.1   |         |  |   | (695.0   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income tax benefit                                                             |                                                       |                |                                     |                |    |             | 38.6         |              |   |   |        |         |  |   | 38.6     |         
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from continuing operations                                              |                                                       |                | (658.5                               | )              |    |             | (453.0       | )            |   |   | 455.1   |         |  |   | (656.4   | )       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Discontinued operations:                                                       |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations, net of taxes     |                |                                      | (2,467.9       | )  |             |              | (1,706.8     | ) |   |         | 1,727.5 |  |   |          | (2,447.2 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Gain on sale of discontinued operations, net of
taxes |                |                                      |               |    |             |              |             |   |   |         |        |  |   |          |         |  
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|(Loss) from discontinued operations                                            |                                                       |                | (2,467.9                             | )              |    |             | (1,706.8     | )            |   |   | 1,727.5 |         |  |   | (2,447.2 | )       
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         
|Net (loss)                                                                     |                                                       | $              | (3,126.4                             | )              |    | $           | (2,159.8     | )            |   | $ | 2,182.6 |         |  | $ | (3,103.6 | )       
|                                                                               |                                                       |                |                                      |                |    |             |              |              |   |   |         |         |  |   |          |         

31



---



##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization (continued)

|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |        |  
|------------------------------------------------------------------------------ | ------------------------------------------------------------ | -------------- | ------------------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ----- | ----- |  | - | ------ | ------ | -
|(in millions)                                                                 
|(unaudited)                                                                   
|                                                                              
|                                                                               |                                                              |                | Three Months Ended September 30, 2002
|                                                                               |                                                              |                |                                      
|                                                                               |                                                              |                |                                       |                |    |             | Entities Not |              |   |   |       |       |  |   |       
|                                                                               |                                                              |                | Entities in                           |                | in |             |              |              |   |   |       |       | 
|Statements of Operations                                                       |                                                              | Reorganization |                                       | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                              |                |                                       |                |    |             |              |             
|Revenue                                                                        |                                                              | $              |                                      |                |    | $           | 127.2        |              |   |   |       |       |  | $ | 127.2  |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Costs and expenses                                                             |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                              |                |                                      |                |    |             | 66.2         |              |   |   |       |       |  |   | 66.2   |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Selling, general and administrative expenses                                   |                                                              |                | 0.3                                   |                |    |             | 35.2         |              |   |   |       |       |  |   | 35.5   |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other charges                                                                  |                                                              |                |                                      |                |    |             | 16.3         |              |   |   |       |       |  |   | 16.3   |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Corporate expenses                                                             |                                                              |                | 3.2                                   |                |    |             |             |              |   |   |       |       |  |   | 3.2    |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Depreciation                                                                   |                                                              |                |                                      |                |    |             | 53.6         |              |   |   |       |       |  |   | 53.6   |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Amortization                                                                   |                                                              |                | 6.4                                   |                |    |             | 26.4         |              |   |   |       |       |  |   | 32.8   |       
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|                                                                               |                                                              |                | 9.9                                   |                |    |             | 197.7        |              |   |   |       |       |  |   | 207.6  |       
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|Operating loss                                                                 |                                                              |                | (9.9                                  | )              |    |             | (70.5        | )            |   |   |       |       |  |   | (80.4  | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other income (expense)                                                         |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest income and other, net                                                 |                                                              |                | 2.4                                   |                |    |             | 1.1          |              |   | $ | (1.5  | )     |  |   | 2.0    |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest expense (contractual interest of $62.4
(2002))                        |                                                              |                | 0.1                                   |                |    |             | (36.4        | )            |   |   |      |       |  |   | (36.3  | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Share of (losses) from equity investments                                      |                                                              |                | (164.8                                | )              |    |             | (6.4         | )            |   |   | 89.8  |       |  |   | (81.4  | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Foreign currency transaction gains                                             |                                                              |                | 0.3                                   |                |    |             | 1.3          |              |   |   |      |       |  |   | 1.6    |       
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                              |                | (171.9                                | )              |    |             | (110.9       | )            |   |   | 88.3  |       |  |   | (194.5 | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Recapitalization items, net                                                    |                                                              |                | 12.1                                  |                |    |             | (2.0         | )            |   |   |      |       |  |   | 10.1   |       
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|(Loss) before income taxes and discontinued
operations                         |                                                              |                | (159.8                                | )              |    |             | (112.9       | )            |   |   | 88.3  |       |  |   | (184.4 | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income tax (expense) benefit                                                   |                                                              |                | (6.8                                  | )              |    |             | 21.5         |              |   |   |      |       |  |   | 14.7   |       
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|(Loss) from continuing operations                                              |                                                              |                | (166.6                                | )              |    |             | (91.4        | )            |   |   | 88.3  |       |  |   | (169.7 | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Discontinued operations:                                                       |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations, net of taxes            |                |                                       | (442.2         | )  |             |              | (619.4       | ) |   |       | 782.3 |  |   |        | (279.3 | )
|                                                                               | (Loss) gain on sale of discontinued operations,
net of taxes |                |                                       | (1.4           | )  |             |              | 1.6          |   |   |       |      |  |   |        | 0.2    |  
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|(Loss) from discontinued operations                                            |                                                              |                | (443.6                                | )              |    |             | (617.8       | )            |   |   | 782.3 |       |  |   | (279.1 | )     
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       
|Net (loss)                                                                     |                                                              | $              | (610.2                                | )              |    | $           | (709.2       | )            |   | $ | 870.6 |       |  | $ | (448.8 | )     
|                                                                               |                                                              |                |                                       |                |    |             |              |              |   |   |       |       |  |   |        |       

32



---



##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization (continued)

|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |        |  
|------------------------------------------------------------------------------ | ----------------------------------------------------- | -------------- | ------------------------------------- | -------------- | -- | ----------- | ------------ | ------------ | - | - | ----- | ----- |  | - | -------- | ------ | -
|(in millions)                                                                 
|(unaudited)                                                                   
|                                                                              
|                                                                               |                                                       |                | Three Months Ended September 30, 2001
|                                                                               |                                                       |                |                                      
|                                                                               |                                                       |                |                                       |                |    |             | Entities Not |              |   |   |       |       |  |   |         
|                                                                               |                                                       |                | Entities in                           |                | in |             |              |              |   |   |       |       | 
|Statements of Operations                                                       |                                                       | Reorganization |                                       | Reorganization |    | Adjustments |              | Consolidated
|                                                                               |                                                       |                |                                       |                |    |             |              |             
|Revenue                                                                        |                                                       | $              |                                      |                |    | $           | 106.4        |              |   |   |       |       |  | $ | 106.4    |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Costs and expenses                                                             |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Operating expenses (exclusive of depreciation shown
separately below)          |                                                       |                |                                      |                |    |             | 45.7         |              |   |   |       |       |  |   | 45.7     |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Selling, general and administrative expenses                                   |                                                       |                |                                      |                |    |             | 44.0         |              |   |   |       |       |  |   | 44.0     |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other charges                                                                  |                                                       |                |                                      |                |    |             | 3.3          |              |   |   |       |       |  |   | 3.3      |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Corporate expenses                                                             |                                                       |                | 11.4                                  |                |    |             |             |              |   |   |       |       |  |   | 11.4     |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Depreciation                                                                   |                                                       |                | 0.7                                   |                |    |             | 44.3         |              |   |   |       |       |  |   | 45.0     |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Amortization                                                                   |                                                       |                | 1.9                                   |                |    |             | 95.8         |              |   |   |       |       |  |   | 97.7     |       
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|                                                                               |                                                       |                | 14.0                                  |                |    |             | 233.1        |              |   |   |       |       |  |   | 247.1    |       
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|Operating loss                                                                 |                                                       |                | (14.0                                 | )              |    |             | (126.7       | )            |   |   |       |       |  |   | (140.7   | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Other income (expense)                                                         |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest income and other, net                                                 |                                                       |                | 9.5                                   |                |    |             | 9.2          |              |   | $ | (6.8  | )     |  |   | 11.9     |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Interest expense                                                               |                                                       |                | (24.6                                 | )              |    |             | (34.0        | )            |   |   | 7.5   |       |  |   | (51.1    | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Share of (losses) from equity investments                                      |                                                       |                | (191.8                                | )              |    |             | (6.7         | )            |   |   | 150.3 |       |  |   | (48.2    | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Foreign currency transaction (losses)                                          |                                                       |                | (1.9                                  | )              |    |             | (4.0         | )            |   |   |      |       |  |   | (5.9     | )     
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|(Loss) before recapitalization items, income taxes
and discontinued operations |                                                       |                | (222.8                                | )              |    |             | (162.2       | )            |   |   | 151.0 |       |  |   | (234.0   | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Recapitalization items, net                                                    |                                                       |                |                                      |                |    |             |             |              |   |   |      |       |  |   |         |       
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|(Loss) before income taxes and discontinued
operations                         |                                                       |                | (222.8                                | )              |    |             | (162.2       | )            |   |   | 151.0 |       |  |   | (234.0   | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Income tax benefit                                                             |                                                       |                |                                      |                |    |             | 12.7         |              |   |   |      |       |  |   | 12.7     |       
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|(Loss) from continuing operations                                              |                                                       |                | (222.8                                | )              |    |             | (149.5       | )            |   |   | 151.0 |       |  |   | (221.3   | )     
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|Discontinued operations:                                                       |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | (Loss) from discontinued operations, net of taxes     |                |                                       | (809.3         | )  |             |              | (348.4       | ) |   |       | 347.5 |  |   |          | (810.2 | )
|                                                                              
|                                                                              
|                                                                              
|                                                                              
|                                                                               | Gain on sale of discontinued operations, net of
taxes |                |                                       |               |    |             |              |             |   |   |       |      |  |   |          |       |  
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|(Loss) from discontinued operations                                            |                                                       |                | (809.3                                | )              |    |             | (348.4       | )            |   |   | 347.5 |       |  |   | (810.2   | )     
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       
|Net (loss)                                                                     |                                                       | $              | (1,032.1                              | )              |    | $           | (497.9       | )            |   | $ | 498.5 |       |  | $ | (1,031.5 | )     
|                                                                               |                                                       |                |                                       |                |    |             |              |              |   |   |       |       |  |   |          |       

33



---



##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization (continued)

|                                                 |  |                    |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|------------------------------------------------ |  | ------------------ | --------- | -------------- |  | ------------ | -------- | ------------ |  | - | --------- | - |  | - | -------- | -
|(in millions)                                   
|(unaudited, except December 31, 2001)           
|                                                
|                                                 |  | September 30, 2002
|                                                 |  |                   
|                                                 |  |                    |           |                |  | Entities Not |          |              |  |   |           |   |  |  
|                                                 |  | Entities in        |           | in             |  |              |          |              |  |   |           |  
|Balance Sheets                                   |  | Reorganization     |           | Reorganization |  | Adjustments  |          | Consolidated
|                                                 |  |                    |           |                |  |              |          |             
|Current assets                                   |  | $                  | 20,526.4  |                |  | $            | 13,486.9 |              |  | $ | (20,037.1 | ) |  | $ | 13,976.2 |  
|                                                
|                                                
|                                                
|                                                
|Investments in and loans to affiliates, net      |  |                    | (13,979.9 | )              |  |              | 1.5      |              |  |   | 14,054.1  |   |  |   | 75.7     |  
|                                                
|                                                
|                                                
|                                                
|Fixed and noncurrent assets                      |  |                    | 228.6     |                |  |              | 2,834.6  |              |  |   | (138.3    | ) |  |   | 2,924.9  |  
|                                                 |  |                    |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total assets                                     |  | $                  | 6,775.1   |                |  | $            | 16,323.0 |              |  | $ | (6,121.3  | ) |  | $ | 16,976.8 |  
|                                                 |  |                    |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|Current liabilities                              |  | $                  | 10,403.3  |                |  | $            | 17,322.7 |              |  | $ | (7,334.6  | ) |  | $ | 20,391.4 |  
|                                                
|                                                
|                                                
|                                                
|Noncurrent liabilities                           |  |                    |          |                |  |              | 247.7    |              |  |   | (34.1     | ) |  |   | 213.6    |  
|                                                
|                                                
|                                                
|                                                
|Liabilities subject to compromise                |  |                    | 4,296.9   |                |  |              |         |              |  |   |          |   |  |   | 4,296.9  |  
|                                                
|                                                
|                                                
|                                                
|Shareholders (deficiency)                       |  |                    | (7,925.1  | )              |  |              | (1,247.4 | )            |  |   | 1,247.4   |   |  |   | (7,925.1 | )
|                                                 |  |                    |           |                |  |              |          |              |  |   |           |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                  | 6,775.1   |                |  | $            | 16,323.0 |              |  | $ | (6,121.3  | ) |  | $ | 16,976.8 |  
|                                                 |  |                    |           |                |  |              |          |              |  |   |           |   |  |   |          |  

|                                                 |  |                   |           |                |  |              |           |              |  |   |           |   |  |   |          |  
|------------------------------------------------ |  | ----------------- | --------- | -------------- |  | ------------ | --------- | ------------ |  | - | --------- | - |  | - | -------- | -
|                                                 |  | December 31, 2001
|                                                 |  |                  
|                                                 |  |                   |           |                |  | Entities Not |           |              |  |   |           |   |  |  
|                                                 |  | Entities in       |           | in             |  |              |           |              |  |   |           |  
|Balance Sheets                                   |  | Reorganization    |           | Reorganization |  | Adjustments  |           | Consolidated
|                                                 |  |                   |           |                |  |              |           |             
|Current assets                                   |  | $                 | 19,472.7  |                |  | $            | 13,384.5  |              |  | $ | (19,059.6 | ) |  | $ | 13,797.6 |  
|                                                
|                                                
|                                                
|                                                
|Investments and loans to affiliates, net         |  |                   | (12,366.8 | )              |  |              | 52.5      |              |  |   | 12,582.1  |   |  |   | 267.8    |  
|                                                
|                                                
|                                                
|                                                
|Fixed and noncurrent assets                      |  |                   | 117.7     |                |  |              | 2,656.7   |              |  |   | (1.3      | ) |  |   | 2,773.1  |  
|                                                 |  |                   |           |                |  |              |           |              |  |   |           |   |  |   |          |  
|Total assets                                     |  | $                 | 7,223.6   |                |  | $            | 16,093.7  |              |  | $ | (6,478.8  | ) |  | $ | 16,838.5 |  
|                                                 |  |                   |           |                |  |              |           |              |  |   |           |   |  |   |          |  
|Current liabilities                              |  | $                 | 10,958.8  |                |  | $            | 29,191.1  |              |  | $ | (19,847.4 | ) |  | $ | 20,302.5 |  
|                                                
|                                                
|                                                
|                                                
|Noncurrent liabilities                           |  |                   | 2,807.2   |                |  |              | 271.2     |              |  |   |          |   |  |   | 3,078.4  |  
|                                                
|                                                
|                                                
|                                                
|Liabilities subject to compromise                |  |                   |          |                |  |              |          |              |  |   |          |   |  |   |         |  
|                                                
|                                                
|                                                
|                                                
|Shareholders (deficiency)                       |  |                   | (6,542.4  | )              |  |              | (13,368.6 | )            |  |   | 13,368.6  |   |  |   | (6,542.4 | )
|                                                 |  |                   |           |                |  |              |           |              |  |   |           |   |  |   |          |  
|Total liabilities and shareholders (deficiency) |  | $                 | 7,223.6   |                |  | $            | 16,093.7  |              |  | $ | (6,478.8  | ) |  | $ | 16,838.5 |  
|                                                 |  |                   |           |                |  |              |           |              |  |   |           |   |  |   |          |  

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)

Note O  Condensed Consolidating Financial Statements of Entities in
Reorganization and Entities Not in Reorganization (continued)

|                                                             |  |                                      |        |                |  |              |       |              |  |   |      |   |  |   |       |  
|------------------------------------------------------------ |  | ------------------------------------ | ------ | -------------- |  | ------------ | ----- | ------------ |  | - | ---- | - |  | - | ----- | -
|(in millions)                                               
|(unaudited)                                                 
|                                                            
|                                                             |  | Nine Months Ended September 30, 2002
|                                                             |  |                                     
|                                                             |  |                                      |        |                |  | Entities Not |       |              |  |   |      |   |  |  
|                                                             |  | Entities in                          |        | in             |  |              |       |              |  |   |      |  
|Statements of Cash Flows                                     |  | Reorganization                       |        | Reorganization |  | Adjustments  |       | Consolidated
|                                                             |  |                                      |        |                |  |              |       |             
|Net cash (used in) operating activities                      |  | $                                    | (69.6  | )              |  | $            | (27.7 | )            |  | $ | (0.4 | ) |  | $ | (97.7 | )
|                                                            
|                                                            
|                                                            
|                                                            
|Net cash provided by (used in) investing activities          |  |                                      | 283.8  |                |  |              | (85.0 | )            |  |   |     |   |  |   | 198.8 |  
|                                                            
|                                                            
|                                                            
|                                                            
|Net cash (used in) provided by financing activities          |  |                                      | (157.9 | )              |  |              | 132.9 |              |  |   | 0.4  |   |  |   | (24.6 | )
|                                                            
|                                                            
|                                                            
|                                                            
|Effect of exchange rate changes on cash and cash
equivalents |  |                                      |       |                |  |              | 12.3  |              |  |   |     |   |  |   | 12.3  |  
|                                                             |  |                                      |        |                |  |              |       |              |  |   |      |   |  |   |       |  
|Increase in cash and cash equivalents                        |  |                                      | 56.3   |                |  |              | 32.5  |              |  |   |     |   |  |   | 88.8  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and cash equivalents at beginning of period             |  |                                      | 127.3  |                |  |              | 103.4 |              |  |   |     |   |  |   | 230.7 |  
|                                                             |  |                                      |        |                |  |              |       |              |  |   |      |   |  |   |       |  
|Cash and cash equivalents at end of period                   |  | $                                    | 183.6  |                |  | $            | 135.9 |              |  | $ |     |   |  | $ | 319.5 |  
|                                                             |  |                                      |        |                |  |              |       |              |  |   |      |   |  |   |       |  

|                                                             |  |                                      |       |                |  |              |        |              |  |   |      |   |  |   |        |  
|------------------------------------------------------------ |  | ------------------------------------ | ----- | -------------- |  | ------------ | ------ | ------------ |  | - | ---- | - |  | - | ------ | -
|                                                             |  | Nine Months Ended September 30, 2001
|                                                             |  |                                     
|                                                             |  |                                      |       |                |  | Entities Not |        |              |  |   |      |   |  |  
|                                                             |  | Entities in                          |       | in             |  |              |        |              |  |   |      |  
|Statements of Cash Flows                                     |  | Reorganization                       |       | Reorganization |  | Adjustments  |        | Consolidated
|                                                             |  |                                      |       |                |  |              |        |             
|Net cash provided by operating activities                    |  | $                                    | 4.7   |                |  | $            | 14.5   |              |  | $ | (0.1 | ) |  | $ | 19.1   |  
|                                                            
|                                                            
|                                                            
|                                                            
|Net cash provided by (used in) investing activities          |  |                                      | 122.7 |                |  |              | (297.1 | )            |  |   |     |   |  |   | (174.4 | )
|                                                            
|                                                            
|                                                            
|                                                            
|Net cash provided by financing activities                    |  |                                      | 15.2  |                |  |              | 237.2  |              |  |   | 0.1  |   |  |   | 252.5  |  
|                                                            
|                                                            
|                                                            
|                                                            
|Effect of exchange rate changes on cash and cash equivalents |  |                                      |      |                |  |              | (2.1   | )            |  |   |     |   |  |   | (2.1   | )
|                                                             |  |                                      |       |                |  |              |        |              |  |   |      |   |  |   |        |  
|Increase (decrease) in cash and cash equivalents             |  |                                      | 142.6 |                |  |              | (47.5  | )            |  |   |     |   |  |   | 95.1   |  
|                                                            
|                                                            
|                                                            
|                                                            
|Cash and cash equivalents at beginning of period             |  |                                      | 71.8  |                |  |              | 56.1   |              |  |   |     |   |  |   | 127.9  |  
|                                                             |  |                                      |       |                |  |              |        |              |  |   |      |   |  |   |        |  
|Cash and cash equivalents at end of period                   |  | $                                    | 214.4 |                |  | $            | 8.6    |              |  | $ |     |   |  | $ | 223.0  |  
|                                                             |  |                                      |       |                |  |              |        |              |  |   |      |   |  |   |        |  

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries




ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Key points concerning our current financial condition and our planned
recapitalization include:

Financial Condition



| |  | NTL Incorporated and its subsidiaries have issued and
outstanding approximately $11.5 billion in senior and
subordinated notes and debentures.                                                                                         
|- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | NTLs UK credit facilities are fully drawn and the revolving
tranche of the Cablecom facility has been capped at its
utilized amount of CHF 1,055.0 million. The term tranche of
the Cablecom facility is fully drawn.                 
| 
| |  | As of May 8, 2002, the date of its Chapter 11 filing, NTL was
in default of $95.4 million in interest in respect of $1,693.4
million in principal amount of its indebtedness.                                                          
| 
| |  | NTL missed interest payments totaling $495.5 million between
April 1, 2002 and November 13, 2002, all of which related to
notes issued by the Company and certain of its subsidiaries.                                                 
| 
| |  | In accordance with the Plan,
NTL does not intend to make future
interest payments on its currently outstanding publicly traded
notes except notes issued by NTL Triangle and, upon emergence
from Chapter 11, Diamond Holdings Limited.

Recapitalization Plan



| |  | On May 8, 2002, NTL Incorporated and a number of its
subsidiaries, namely, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings
Limited and Communications Cable Funding Corp., filed a
pre-arranged joint reorganization plan under Chapter 11 of the
United States Bankruptcy Code.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Under the Second Amended Joint Reorganization Plan of NTL
Incorporated and Certain Subsidiaries, dated July 15, 2002 (as
modified and confirmed on September 5, 2002) (the Plan), NTL
will be split into two separate companies, one holding
substantially all of NTLs UK and Ireland assets (New NTL),
and the other holding various continental European and other
assets (NTL Euroco).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| 
| |  | Under the Plan, holders of notes of NTL Incorporated, NTL
(Delaware), Inc., NTL Communications Corp. and Diamond Cable
Communications will receive 100% of the initial common stock
of New NTL and approximately 86.5% of NTL Euroco.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| 
| |  | Holders of notes of NTL (Delaware), Inc. will have the option
to reinvest all or a portion of the NTL (Delaware), Inc. cash
to which they are entitled under the Plan in additional shares
of common stock, pursuant to the exercise of the noteholder
election option, or to be distributed such cash upon
effectiveness of the Plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| |  | Common and preferred stockholders, including France Telecom,
will be distributed a package of equity rights and Series A
warrants entitling them to purchase primary common stock of
New NTL. In addition, current preferred stockholders, other
than France Telecom, will receive approximately 3.2% and
current common stockholders, other than France Telecom, will
receive approximately 10.3% of the primary equity of NTL
Euroco.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| 
| |  | Concurrently with the equity rights offering, holders of the
subordinated notes of NTL Incorporated (other than France
Telecom), NTL (Delaware), Inc. (other than France Telecom),
and NTL Communications Corp. were given the option to apply
cash they will be entitled to receive upon effectiveness of
the Plan to purchase shares of New NTL common stock, plus any
shares (and accompanying Series A warrants) not subscribed for
in the equity rights offering (referred to as the noteholder
election option). The equity rights offering and the
noteholder election option expired on October 3, 2002. Since
that time, NTL has allowed electing holders to
revoke their exercises of equity rights and the noteholder election
option. As of November 12, 2002, there were a total of 2,654
exercises of equity rights and 1,861 exercises of the noteholder
election option which had not been revoked.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries



| |  | Under the Plan, NTL will convert approximately $10.9 billion of debt to
equity, thereby reducing New NTLs debt to approximately $5.8 billion (pro
forma net debt as of September 30, 2002) which will consist of mortgage
notes, amounts owed under the UK credit facilities and Diamond Holdings
and NTL Triangle notes and the projected exit facility.                                                                        
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Under the Plan, NTL Eurocos debt will consist of the Cablecom credit
facility of CHF 1,055.0 million.                                                                                                                                                                                                                                                                                                                            
| 
| |  | The Bankruptcy Court approved the proposed debtor in possession (referred to as DIP) financing in the principal amount of
$630 million by order dated July 3, 2002. The DIP facility was entered into on July 15, 2002. The DIP facility expires on
the earlier of December 1, 2002 and the consummation of the Plan (unless such maturity is extended by the DIP lenders), and
thus will need to be replaced by an exit facility.
| 
| |  | At a hearing on July 12, 2002, the Bankruptcy Court approved the Companys amended disclosure statement.                                                                                                                                                                                                                                                                                                                          
| 
| |  | On September 5, 2002, the Bankruptcy Court confirmed the Plan. Consummation of the Plan remains subject to the
satisfaction or waiver of the conditions set forth in the Plan.                                                                                                                                                                                                                                                    

Liquidity and Capital Resources

Recapitalization Process and Ability to Continue Operations

On May 8, 2002, NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed a pre-arranged joint reorganization
plan under Chapter 11 of the Bankruptcy Code (the Plan). NTLs operating
subsidiaries were not included in the Chapter 11 filing. On September 5, 2002,
the United States Bankruptcy Court for the Southern District of New York (the
Bankruptcy Court) confirmed the Plan. The consummation of the Plan is
subject to the satisfaction or waiver of certain conditions set forth in the
Plan. Among other things, the most substantial conditions include obtaining
exit financing for NTL and obtaining the consent of NTLs UK bank lenders to
such financing and to modifications to the terms of the UK bank facilities
acceptable to both NTL and NTLs official creditors committee. Although NTL
is currently finalizing negotiations with a group of potential lenders for such
an exit facility, there can be no assurance that it will be able to reach final
agreement on terms. If no agreement can be reached and an alternate source of
exit financing cannot be secured, NTL may not be able to consummate the Plan.
Moreover, NTL is currently in discussions with the UK lenders regarding the
above matters, but cannot be certain that they will be resolved successfully.
If we fail to meet either condition, the Debtors would be unable to consummate
the Plan and continue to remain in Chapter 11, and there can be no assurance
that an alternative plan of reorganization could be reached in a timely manner
or at all.

NTL has historically incurred operating losses and negative operating cash
flow. In addition, NTL required and expects to continue to require significant
amounts of capital to finance construction of its networks, connection of
customers to the networks, other capital expenditures and for working capital
needs including debt service requirements. NTL historically met these liquidity
requirements through cash flow from operations, amounts available under its
credit facilities, vendor financing and issuances of high-yield debt securities
and convertible debt securities in the capital markets and convertible
preferred stock and common stock to strategic investors. Both the equity and
debt capital markets have experienced periods of significant volatility,
particularly for securities issued by telecommunications and technology
companies. The ability of telecommunications companies to access those markets
as well as their ability to obtain financing provided by bank lenders and
equipment suppliers has become more restricted and financing costs have
increased. During some recent periods, the capital markets have been largely
unavailable to new issues of securities by telecommunications companies. NTL
Incorporateds public equity is no longer trading on the New York Stock
Exchange, and NTLs debt securities are trading at or near all time lows. These
factors, together with NTLs substantial leverage, means NTL does not currently
have access to its historic sources of capital.

In addition, there are no further funds available under NTLs UK credit
facilities and NTLs Swiss subsidiaries are currently unable to draw the
remaining undrawn amounts under the Cablecom credit facility. NTL missed
interest payments totaling $495.5 million between April 1, 2002 and November
13, 2002, all of which related to notes issued by NTL Incorporated and certain
of its subsidiaries. Upon emerging from Chapter 11, NTL intends to make any
required interest payments on the notes of Diamond Holdings. In accordance with
the Plan, NTL will not make future interest payments on its currently
outstanding publicly traded notes except notes issued by NTL (Triangle) LLC
and, upon emergence from Chapter 11, Diamond Holdings Limited.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Pursuant to the Plan, if consummated, NTL will be split into two separate
companies, one which will take the name NTL Incorporated, holding NTLs main UK
and Ireland assets (which we refer to as New NTL), and one which will be
called NTL Europe, Inc., holding NTLs continental European and certain other
assets (which we refer to as NTL Euroco). Upon consummation of the Plan, NTL
Euroco will hold Cablecom, NTLs cable business in Switzerland, and Premium TV
Limited, NTLs sports TV content and internet business in the UK, and will
retain NTLs investment interests in cable networks in Scandinavia and Germany
(B2 and iesy, respectively). Its interests will also include NTLs equity
investments in the cable channel content providers of the ITN News Channel and
The Studio Channel, as well as certain other assets.

Assuming the Plan is consummated, New NTLs and NTL Eurocos ability to meet
their respective funding requirements following consummation of the Plan are
dependent upon a number of factors, including the revenue generated by their
operating subsidiaries, their existing cash balances, and their ability to draw
upon an exit facility (in the case of New NTL) or any other financing. NTL will
be required to replace the DIP facility with an exit facility for New NTL and
its subsidiaries upon emergence from Chapter 11, in part because the DIP
facility will mature concurrently with NTLs emergence from Chapter 11, or on
December 1, 2002, whichever is earlier (unless such maturity is extended by the
DIP lenders). There can be no assurance that these sources of financing will
be or will remain available. Assuming consummation, each of New NTL and NTL
Euroco will require substantial funds for general corporate and other expenses
and may require additional funds for working capital fluctuations. Failure to
achieve profitability or maintain or achieve various other financial
performance levels could in the future diminish New NTLs and Eurocos
respective ability to sustain operations, meet financial covenants, obtain
additional funds required for capital expenditures or other purposes, and make
required payments on any indebtedness they have incurred, may incur or that may
then, as a result, become due. We can provide no assurance that New NTL and/or
NTL Euroco will be successful in raising additional financing if required, or
if successful, that the terms of such financing will be favorable. In the
event that NTL fails to consummate the Plan, the foregoing description will
continue to apply to NTL.

New NTL expects that it will require approximately $650 million to fund its
working capital and capital expenditures, net of cash from operations, and
certain payments required upon consummation of the Plan (namely the settlement
of recapitalization costs with NTL Euroco, the repayment or purchase of the £90
million loan from NTL (Delaware), Inc. to NTL (UK) Group Inc. and the UK credit
facilities amendment fee) in the twelve months from October 1, 2002 to
September 30, 2003. New NTL believes that cash, cash equivalents and
marketable securities on hand of $330.5 million at September 30, 2002, and the
cash available from the DIP facility and subsequently the planned exit facility
will be sufficient for New NTLs cash requirements during the twelve months
from October 1, 2002 to September 30, 2003 (assuming consummation of the Plan).
The Companys ability to meet its funding requirements upon consummation of
the Plan is dependent upon a number of factors, including the revenue generated
by its operating subsidiaries, its existing cash balances, and its ability to
obtain new financing. The Company currently expects that it will require
approximately $150 million to fund its working capital and capital
expenditures, net of cash from operations, in the twelve months from October 1,
2002 to September 30, 2003. The Company believes that cash, cash equivalents
and marketable securities on hand of $330.5 million at September 30, 2002 will
be sufficient for its and its subsidiaries cash requirements during the twelve
months from October 1, 2002 to September 30, 2003. In addition, upon
consummation of the Plan, NTL Euroco is currently expected to pay approximately
$120 million out of its cash on hand for (1) the payments to the holders of NTL
Incorporated, NTL (Delaware), Inc. and NTL Communications Corp. public notes,
and (2) for the redemption of a portion of NTL Incorporateds preferred stock,
net of cash to be received for (1) the repayment of the £90 million note
payable to NTL (Delaware), Inc. from NTL (UK) Group, Inc., (2) the
reimbursement by NTL Communications Corp. of the recapitalization costs paid on
its behalf, and (3) the France Telecom payment for the benefit of NTL Euroco.

If the exit facility is not obtained and the Plan is not consummated, NTL will
need to seek an extension of the DIP facility maturity or identify alternative
sources of financing.

It is anticipated that the Company will require substantial financing to
continue operations because, among other things, the Cablecom bank facilities
of $2,544.4 million at September 30, 2002 become repayable on April 30, 2003.
There can be no assurance that the Company or any of its subsidiaries, or
following consummation NTL Euroco and its subsidiaries, will be able to raise
sufficient funds to meet their liquidity requirements.

Over the long term, New NTL will continue to require cash to fund operations,
service its remaining debt and implement its strategy. In order to fund these
requirements, New NTL anticipates that it will use cash flow from operations
and may also need to issue additional debt or equity securities or may need to
secure additional bank financing. New NTLs current financial condition and the
restrictions on incurring additional debt that are expected to be contained in
the exit facility currently being negotiated, there can be no assurance that
these sources of funds will be available to New NTL.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

During the recapitalization process, NTL has maintained normal and regular
trade terms with its suppliers and customers. There can be no assurance that
the Companys suppliers will continue to provide normal trade credit or credit
on acceptable terms, if at all, or that customers will continue to do business
or enter into new business with NTL. See also Risk Factors for a summary of
risks related to NTLs business in general and the recapitalization process in
particular.

Events Leading to the Proposed Recapitalization and Chapter 11 Filings

Beginning in January 2002, NTL was contacted by an unofficial committee of
bondholders regarding the commencement of a comprehensive and consensual
restructuring process. NTL was informed at that time that the members of the
unofficial steering committee of bondholders owned, in the aggregate, more than
50% of the outstanding principal amount of NTLs notes. In connection with the
restructuring process, the steering committee of the unofficial committee of
bondholders retained advisors to facilitate the negotiations.

On January 31, 2002, NTL announced that it had appointed Credit Suisse First
Boston, JP Morgan and Morgan Stanley to advise on strategic and
recapitalization alternatives to strengthen its balance sheet and reduce debt
and put an appropriate capital structure in place for its business.
Subsequently, NTL evaluated various recapitalization alternatives, and met with
a number of strategic investors, to effect a comprehensive consensual
reorganization in a timely manner to minimize negative effects on its business
operations. Discussions with such strategic investors did not result in a
proposal which NTLs board of directors believed was comparable or superior to
the value provided to its stakeholders by the proposed plan of reorganization.

Promptly upon obtaining the requisite waivers from the lenders under its credit
facilities, in March 2002, NTL commenced negotiations with the steering
committee of the unofficial committee of bondholders and its legal and
financial advisors. On April 16, 2002, the Company announced that it had
reached a comprehensive agreement in principle with the unofficial committee
and France Telecom, a significant holder of NTL Incorporateds preferred stock,
on implementing a recapitalization plan.

To implement the proposed recapitalization, on May 8, 2002, the Debtors filed
cases and a pre-arranged joint reorganization plan under Chapter 11. NTLs
operating subsidiaries were not included in the Chapter 11 filing. On June 21,
2002, the United States Trustee appointed an official unsecured creditors
committee. The creditors committee is comprised of the three indenture
trustees for the debt securities of NTL and the members of the steering
committee of NTLs bondholders. The members of the creditors committee are:
The Bank of New York; Wilmington Trust Company; Wells Fargo Bank Minnesota,
National Association; Angelo Gordon & Co. LP; Capital Research & Management
Company; Franklin Mutual Advisers, LLC; Oaktree Capital Management LLC; Salomon
Brothers Asset Management; Appaloosa Management, LP; Fidelity Management &
Research Co.; SAB Capital Management, L.P.; and W.R. Huff Asset Management Co.,
LLC.

The Plan was confirmed by the Bankruptcy Court on September 5, 2002.
Consummation remains subject to the satisfaction or waiver of certain
conditions described above.

Assuming the Plan is consummated, the Plan will result in the cancellation of
all of NTL Incorporateds outstanding shares of common stock, preferred stock
and redeemable preferred stock, and the cancellation of all of the publicly
held notes of NTL Incorporated, NTL (Delaware), Inc. and NTL Communications
Corp. and the transfer of the publicly held notes of Diamond Cable
Communications Limited to New NTL. In addition, when the Plan is implemented,
NTL will be discharged from its obligation to pay dividends accruing on the
canceled preferred stock and interest accruing on the canceled notes. The Plan
contemplates that the UK bank debt and the notes issued by NTL (Triangle) LLC
and Diamond Holdings will remain in place. NTL will be split into New NTL and
NTL Euroco.

The filing of the petitions seeking relief filed under Chapter 11 constituted
an event of default under the indentures of each of the Debtors and amounts
outstanding under these indentures became immediately due and payable. No
action has been taken to date in respect of those defaults and any such action
likely would be barred by the automatic stay that exists by virtue of
the Chapter 11 filings. The filing of the Debtors Chapter 11 petitions also
constituted an event of default under NTLs UK credit facilities and the
Cablecom credit facility, allowing the lenders thereunder to declare amounts
outstanding to be immediately payable. Those lenders have not taken any action
to date in respect of those defaults.

39



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Recapitalization Expense

Recapitalization items, net of $11.6 million in the nine months ended September
30, 2002 includes $0.1 million for employee retention related to substantially
all of our UK employees and $12.9 million for financial advisor, legal,
accounting and consulting costs. These costs are net of $1.4 million of
interest earned on accumulated cash since the Chapter 11 filing on May 8, 2002.
We expect to incur approximately $26.0 million in additional recapitalization
costs until we complete the process. The proposed joint reorganization plan
provides that recapitalization costs will be allocated between NTL UK and
Ireland and NTL Europe.

Recapitalization items, net consist of the following:

|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 
|------------------------------------------------------------------ |  | ------------------ | ---- | ----------------- |  | ---- | - | ---- |  | - | ----- | - |  | - | - | 
|                                                                   |  | Three Months Ended |      | Nine Months Ended
|                                                                   |  | September 30,      |      | September 30,    
|                                                                   |  |                    |      |                  
|                                                                   |  | 2002               |      | 2001              |  | 2002 |   | 2001
|                                                                   |  |                    |      |                   |  |      |   |     
|                                                                   |  | (in millions)     
|Payroll and related                                                |  | $                  | 0.1  |                   |  | $    |  |      |  | $ | (0.1  | ) |  | $ |  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Professional fees                                                  |  |                    | 9.2  |                   |  |      |  |      |  |   | (12.9 | ) |  |   |  | 
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Interest earned on
accumulated cash from
Chapter 11 proceeding (1) |  |                    | 0.8  |                   |  |      |  |      |  |   | 1.4   |   |  |   |  | 
|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 
|                                                                   |  | $                  | 10.1 |                   |  | $    |  |      |  | $ | (11.6 | ) |  | $ |  | 
|                                                                   |  |                    |      |                   |  |      |   |      |  |   |       |   |  |   |   | 

Details of operating cash receipts and payments resulting from the
recapitalization, including amounts included in discontinued
operations, are as follows:

|                                                     |  |                    |       |  
|---------------------------------------------------- |  | ------------------ | ----- | -
|                                                     |  | Nine Months Ended 
|                                                     |  | September 30, 2002
|                                                     |  |                   
|                                                     |  | (in millions)     
|Interest income (1)                                  |  | $                  | 1.4   |  
|                                                    
|                                                    
|                                                    
|                                                    
|Payroll and related costs paid                       |  |                    |      |  
|                                                    
|                                                    
|                                                    
|                                                    
|Professional fees                                    |  |                    | (45.9 | )
|                                                     |  |                    |       |  
|Net operating cash flows from recapitalization items |  | $                  | (44.5 | )
|                                                     |  |                    |       |  



---

|(1) |  | Interest income resulting from recapitalization is for the period May
8, 2002 through September 30, 2002.
|--- |  | ---------------------------------------------------------------------------------------------------------

DIP Facility

In connection with the Plan, some members of the official unsecured creditors
committee of bondholders committed to provide up to $500 million of new debt
financing to enable the business operations of NTL Incorporated and some of its
subsidiaries to have access to sufficient liquidity to continue ordinary
operations during the Chapter 11 process. The Bankruptcy Court approved a DIP
facility in the principal amount of $630 million (including a $130 million
commitment from NTL (Delaware), Inc. and the $500 million from certain members
of the creditors committee) in an order entered on July 3, 2002. On July 15,
2002, the various lenders under the DIP facility and NTL (Delaware), Inc.
entered into the DIP facility agreement with Communications Cable Funding
Corp., a wholly-owned subsidiary of NTL Communications Corp., to provide $630
million in financing to Communications Cable Funding Corp.

Under the DIP facility agreement, the loan structure contains three tranches
that rank equally with each other. All amounts owed under the DIP facility
agreement are required to be paid in full no later than the earlier of (i) the
consummation of the Plan, (ii) December 1, 2002, and (iii) the date on which
all of the term loans become due and payable in full under the DIP facility
agreement, whether by acceleration or otherwise (unless maturity is extended by
the DIP lenders).

On July 17, 2002, NTL drew the first tranche available under the facility in
the amount of $229.0 million. As of September 30, 2002, the total amount
outstanding under the DIP facility was $229.0 million.

40



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

In connection with the commitment, NTL Incorporated and its debtor subsidiaries
paid a commitment fee to the bondholder DIP lenders equal to 2% of the $500
million commitment (i.e., $10 million) in May 2002. In connection with the
closing of the DIP facility, NTL Incorporated and its debtor subsidiaries paid
a closing fee to the DIP lenders equal to 2% of the $630 million commitment
(i.e., $12.6 million) in July 2002.

Each term loan under the DIP facility bears interest on the unpaid principal
amount for three months from July 15, 2002 at the rate of 11% per annum. With
respect to each successive three month period following that date, the rate per
annum will increase incrementally by 1% over the immediately preceding three
month period but will not exceed 18% per annum for any three month period.
Interest is payable in cash at least monthly. The DIP facility also includes
an unutilized commitment fee of 1/2% per annum on the aggregate principal
amount of unutilized commitments which is payable in cash each month.

NTL (Delaware), Inc. is also a lender under the DIP facility in the amount of
up to $130 million. NTL (Delaware), Inc. has cash on hand and NTL Incorporated
and its debtor subsidiaries and the steering committee of bondholders concluded
that the cash at NTL (Delaware), Inc. was to be used to partially fund the
reorganization of all of the debtors. Pursuant to the terms of the DIP
facility, NTL (Delaware), Inc. receives fees, will receive interest if and when
it makes any loans, and is entitled to the same protections as the other
bondholder DIP lenders.

Under the DIP facility agreement, Communications Cable Funding Corp. is the
borrower, NTL Incorporated, NTL (Delaware), Inc. and NTL Communications Corp.
are guarantors. NTL Communications Corp. is also a co-obligor of the loans from
NTL (Delaware), Inc. Under the DIP facility agreement, with certain exceptions,
the cash (except for the DIP facility proceeds) of the borrower and the
guarantors is cash collateral for the DIP facility and will not be used or
transferred for any purpose whatsoever without the consent of the bondholder
DIP lenders. All funding needs of the Debtors will be funded through the
proceeds of the DIP facility, in accordance with a budget and the terms of the
DIP facility agreement.

A copy of the DIP facility agreement was attached as an exhibit to NTL
Incorporateds Current Report on Form 8-K filed with the Securities and
Exchange Commission on July 19, 2002.

Exit Facility

Because of the short maturity of the DIP facility and the longer term liquidity
needs of NTL, as well as the requirements under the Bankruptcy Code for
confirmation of and the conditions to consummation of the Plan, NTL requires an
exit financing facility for New NTL. The exit financing or any alternative
financing would refinance (at least in part) the DIP facility and be used as
consideration for the refinancing or repurchase of a £90 million note payable
to NTL (Delaware), Inc. from NTL (UK) Group Inc. NTL is currently finalizing
discussions with a group of lenders regarding the exit facility, although given
the unfavorable present market conditions for telecommunications companies
generally, there can be no assurance an agreement for an exit facility with
acceptable terms will be reached. If acceptable exit financing is not
obtained, the Plan could not be consummated and NTL could not emerge from
Chapter 11 in accordance with the Plan.

NTL expects that the exit facility will be secured by various assets of New
NTL, including those which secure the DIP facility, will rank senior to all
current and future subordinated debt of New NTL, and will be guaranteed by
certain subsidiaries of New NTL.

NTL also expects that the exit facility will impose operating and financial
restrictions on New NTL and its subsidiaries. These restrictions will
significantly limit or prohibit, among other things, New NTLs ability and the
ability of its subsidiaries to incur additional indebtedness, pay dividends, or
make distributions in respect of capital stock, make other restricted payments,
enter into sale and leaseback transactions, create liens upon assets, enter
into transactions with affiliates or related persons, sell assets, or
consolidate, merge, or sell all or substantially all of their assets. NTL
anticipates that these restrictive covenants could materially impact New NTLs
ability to finance future operations or capital needs through debt or equity
financing or to engage in other business activities.

The terms, covenants, and conditions of an exit facility have not been
finalized and remain subject to negotiation and final documentation, as well as
approval by NTLs UK bank lenders to its terms.

The exit facility for New NTL and its subsidiaries will not be available to NTL
Euroco. It is anticipated that NTL Euroco and its subsidiaries will require
substantial financing to continue operations because, among other things, the
Cablecom bank facilities become repayable on April 30, 2003, unless otherwise
refinanced. There can be no assurance that NTL Euroco (or any subsidiary
thereof) will be able to raise sufficient funds to meet its liquidity
requirements following consummation.

41



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

The Plan

In addition to the split into New NTL and NTL Euroco, the following are the
details of the Plan:



| |  | Holders of notes of NTL Incorporated (other than France Telecom), NTL
(Delaware), Inc. (other than France Telecom), NTL Communications Corp.
and Diamond Cable Communications Limited will in the aggregate receive
100% of the initial common stock of New NTL (excluding shares
issuable in the rights offerings and upon the exercise of warrants
(discussed below) and upon the exercise of options which will be
granted to certain employees of New NTL).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | Holders of notes of NTL Incorporated (other than France Telecom), NTL
(Delaware), Inc. (other than France Telecom) and NTL Communications
Corp. will in the aggregate receive (i) 100% of the preferred stock of
NTL Euroco and (ii) a certain amount of cash as specified in the Plan.
Holders of the subordinated notes of NTL Incorporated (other than
France Telecom), NTL (Delaware), Inc. (other than France Telecom) and
NTL Communications Corp. will in the aggregate receive 86.5% of the
initial common stock of NTL Euroco (excluding shares issuable upon the
exercise of options which will be granted to certain employees of NTL
Euroco).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| 
| |  | Holders of senior notes of NTL Communications Corp. will receive the
value of a specified number of shares of common stock of NTL Euroco
pursuant to the amended joint reorganization plan. Notes of NTL
Communications Corp.s subsidiaries Diamond Holdings Limited and NTL
(Triangle) LLC will remain outstanding and interest payments will be
made on the notes of NTL (Triangle) LLC and, upon emergence from
Chapter 11, the notes of Diamond Holdings.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| 
| |  | In addition to the above, holders of several series of NTLs
outstanding convertible subordinated notes were granted an option to
elect to purchase additional shares of New NTL common stock (and
accompanying Series A Warrants) not subscribed for in the equity
rights offering as described below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| 
| |  | Current preferred and common stockholders of NTL Incorporated,
including France Telecom, will receive Series A warrants to purchase
common stock of New NTL and have received equity rights entitling them
to purchase common stock of New NTL. For each share of common stock
purchased upon exercise of equity rights, the person exercising such
equity rights will receive a Series A warrant to purchase one share of
common stock of New NTL. The Series A warrants will be exercisable for
a period of eight years at an exercise price of $77.47 per share. The
exercise price and the number of shares to be received upon exercise
of the Series A warrants is subject to customary adjustments for stock
splits, stock recapitalizations and distributions of property (other
than cash) to holders of New NTL common stock. The exercise price per
share of New NTL common stock under the equity rights offering and the
noteholder election option was $25.28, which NTL expects will
substantially exceed the likely initial market price for a share of
New NTL common stock upon consummation, and which is also subject to
adjustment consistent with the Series A warrants.
| 
| |  | The equity rights offering and the noteholder election option expired
on October 3, 2002. Since the expiration of the equity rights offering
and the noteholder election option, NTL has allowed equity holders who
have exercised equity rights and noteholders who have exercised their
noteholder election option to revoke such exercises. As of November
12, 2002, there were a total of 2,654 exercises of equity rights
(including oversubscriptions) and 1,861 exercises of the noteholder
election option which had not been revoked. Prior to consummation of
the Plan, NTL will continue to permit persons who have exercised
equity rights and the noteholder election option to revoke their
exercise so the final number of exercises may be lower.                                                                                                                                                                                                                                                                                                                                                                                                                             
| 
| |  | Current preferred stockholders, other than France Telecom, will
receive approximately 3.2% and current common stockholders, other than
France Telecom, will receive approximately 10.3% of the primary equity
of NTL Euroco. France Telecom will also receive NTL Incorporateds
27% interest in Noos, pursuant to a pledge of such interest to France
Telecom given at the time of its acquisition.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

NTL has received a conditional approval to have the shares of common stock and
Series A warrants of New NTL quoted on the Nasdaq National Market upon
consummation of the Plan. However, this approval is conditioned upon, among
other things, New NTLs ability to meet the $5.00 minimum bid requirement of
the Nasdaq National Market listing requirements on the first day of trading.
There can be no assurance that this requirement will be met, or that in the
future New NTL will be able to meet other continued listing requirements of the
Nasdaq National Market. NTL currently expects that the NTL Euroco common stock
and preferred stock will not be quoted on any market or listed on any
securities exchange. There may be no trading market for the common stock and
the preferred stock of NTL Euroco.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

On November 12, 2002, NTL filed a motion with the Bankruptcy
Court to allow it, after consultation with the Committee, to reduce by
one-third the number of authorized shares of New NTL common stock and to reduce
by three-fourths the number of shares of New NTL common stock issued and
reserved for issuance under the Plan. If the motion is approved by the
Bankruptcy Court, NTL would take this step only (i) after consultation with the
Committee and (ii) if NTL were to determine, after an evaluation of the trading
prices of the shares of New NTL common stock on the when-issued market prior
to the consummation of the Plan, that a reduction in the number of shares of
New NTL common stock is necessary to better enable New NTL to satisfy the first
trading day minimum closing bid price per share requirement of NASDAQ.

With respect to the proposed preferred shares of NTL Euroco to be issued upon
consummation, prior to consummation of the Plan, NTL may file a motion with the
Bankruptcy Court seeking to modify the Plan to reduce the liquidation
preference from $1,000.00 per share of preferred stock of NTL Euroco, plus
accrued and unpaid dividends, to $50.00 per share of preferred stock of NTL
Euroco, plus accrued and unpaid dividends. As a result of the aforementioned
adjustment (i) the number of shares of preferred stock of NTL Euroco authorized
under the NTL Euroco Amended and Restated Certificate of Incorporation would be
increased from 1,000,000 to 20,000,000 and (ii) 8,000,000 shares of NTL Euroco
preferred stock would be authorized under the NTL Euroco Amended and Restated
Certificate of Incorporation. This is intended to enhance the ability for
these shares to trade if a trading market develops.

Bank Waivers

Before NTL could commence negotiations with the unofficial committee of
bondholders, it was necessary to obtain waivers from the lenders under its UK
credit facilities and the credit facility utilized by Cablecom GmbH, the
principal trading subsidiary of its Swiss companies. Effective March 8, 2002,
these lenders granted waivers which, until March 29, 2002, provided that the
commencement of negotiations with bondholders with a view to rescheduling its
debt would not constitute an event of default under the credit facilities.

In connection with the granting of the initial waivers, NTL agreed, among other
things:



| |  | to provide the lenders under the UK credit facilities with a 13 week rolling
cash flow projection (updated every two weeks);                                                 
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | to keep the lenders informed of, and to provide documents in connection with,
negotiations with bondholders or strategic investors or concerning proposed
asset dispositions;
| 
| |  | not to repurchase NTL notes; and                                                                                                                                             
| 
| |  | not to make an exchange offer for NTL notes or enter into an agreement with
NTL bondholders, subject to some exceptions, without the consent of the
lenders.                 

Effective March 28, 2002, the lenders under the credit facilities agreed to
amend the initial waivers. The amendments to the initial waivers extended the
duration of the initial waivers to April 29, 2002 in the case of the UK credit
facilities or May 14, 2002 in the case of the Cablecom facility, unless the
missed interest payments on April 1, 2002 were remedied or a sufficient number
of bondholders agreed to forbear in respect of such non-payment, in which case,
the UK credit facilities waivers would be extended to May 14, 2002. As a
condition to the waivers continuing effectiveness, the UK lenders required NTL
(Delaware), Inc. to loan £90 million to NTL (UK) Group, Inc. following receipt
of the proceeds from the sale of NTL Australia. This loan is structurally
senior to the outstanding public notes issued by NTL but contractually
subordinated to the working capital facility. In connection with the amendments
to the waivers, NTL affirmed the provisions of the initial waivers and in
addition, NTL agreed, among other things, to:



| |  | provide the bank lenders a timeline setting forth the steps proposed to be taken in connection with the
recapitalization and the dates by which such steps are to be taken;                                                                            
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | use reasonable endeavors to consider with the lenders under the Cablecom credit facility possible means
of credit enhancement;                                                                                                                         
| 
| |  | provide the lenders under the Cablecom credit facility, by April 12, 2002, with an updated structure
chart of NTL as well as a contingency business plan for Cablecom in the event that sufficient additional
funding for Cablecom is not obtained; and
| 
| |  | pay legal, accounting and other advisory fees of the agent and the coordinators of the lending
syndicates.                                                                                                                                             

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

The amended waivers also prohibited NTL from commencing voluntary dissolution
proceedings, including proceedings under Chapter 11, without the consent of
these lenders. As a consequence, NTL cannot enter into a binding agreement
with the unofficial bondholder committee or implement the proposed plan without
the consent of the bank lenders. Nor, as of the date of this Form 10-Q, are
there any current waivers from NTLs secured lenders and NTL is therefore in
default under its UK credit facilities and the Cablecom credit facility. The
lenders under those credit facilities are therefore entitled to declare the
principal amount of the outstanding debt immediately due and payable and to
enforce the security taken to secure those facilities. It is a condition to
consummation of the Plan that the UK credit facilities are restated on terms
acceptable to the Debtors and the official creditors committee. In connection
with the Plan, it is intended that the existing events of default under the
credit facilities will be cured by waiver or amendment with effect from the
Effective Date of the Plan.

As of December 31, 2001, Cablecoms and various of its subsidiaries
liabilities exceeded their respective assets. As a consequence, under Swiss
law, those entities were deemed to be overindebted. Under Swiss law, unless
the overindebtedness were rectified, those entities would have been required to
commence an insolvency proceeding in Switzerland.

On April 30, 2002, Cablecom reached an agreement with the lenders under the
Cablecom credit facility under which the defaults subsisting at that time were
remedied or were waived by the restatement of the credit agreement and the
grant of a waiver letter. Conditions subsequent such as the grant of new
security and the deposit of share certificates relating to minority
shareholdings pledged to the banks were imposed by these documents and other
new finance documents executed pursuant to the restatement. The
overindebtedness of Cablecom GmbH was resolved by a restructuring of
intra-group debt and temporary measures were introduced to ameliorate the
effect of the overindebtedness of Cablecoms subsidiaries.

As part of the April 30 agreement, the Cablecom lenders required the final
maturity date of the Cablecom credit facility to be brought forward to April
30, 2003. They also required steps to be initiated towards the sale of all, or
part of, or an investment in, the Cablecom group.

The problem of historic overindebtedness was resolved on June 26 and June 27,
2002 in certain of the overindebted subsidiaries when they were merged into
Cablecom and other members of the Cablecom group. The remaining overindebted
subsidiaries were not merged but the overindebtedness issue was ameliorated in
those subsidiaries by way of subordination agreements which obviated any
requirement to institute insolvency proceedings in respect of these companies.

Since the end of April 2002, the following defaults have occurred under the
Cablecom finance documents: (1) the indentures issued by NTL (Delaware), Inc.
and NTL Incorporated became payable and were not paid; (2) NTL (Delaware), Inc.
commenced negotiations with its creditors with a view to the general
rescheduling of its indebtedness and commenced cases under Chapter 11 pursuant
to which it reorganized its debt; (3) NTL (Delaware), Inc.s liabilities
exceeded the value of its assets and it was unable to pay its debts as they
became due; (4) Cablecom was unable to satisfy the conditions to allow it to
rollover revolving advances maturing in early July 2002; the revolving advances
remained unpaid for several days until Cablecom was able to obtain the consent
of the banks to waive the conditions to their rollover; and (5) certain of the
conditions subsequent imposed by the restated credit agreement, the waiver
letter and other finance documents executed pursuant to the restated credit
agreement had not been fulfilled.

Although it is not a condition to consummation of the Plan, it is proposed to
obtain a waiver of the events of default described in the preceding paragraph
by the effective date of the Plan.

Future developments in Cablecoms business, as well as external factors, could
result in a reemergence of the overindebtedness issue under Swiss law. In
particular, the Cablecom credit facility is due for repayment on April 30, 2003
and it will not be possible to repay the facility without substantial
investment from a third party or further borrowing.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Interest Payments on Public Notes

The Company and its subsidiaries have substantial interest payment obligations
under their existing indebtedness. The Company and its subsidiaries did not
make their scheduled interest payments on the respective due dates as follows:

|                                                    |  |                        |  |              
|--------------------------------------------------- |  | ---------------------- |  | -------------
|April 1, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $8.6 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% noted due 2010 |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|April 15, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|May 15, 2002:                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/4% notes due 2006  |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 6-3/4% notes due 2008  |  | $38.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-7/8% notes due 2009  |  | $15.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $65.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|June 15, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Communications Limited                              |  | 11-3/4% notes due 2005 |  | $31.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 7% notes due 2008      |  | $17.1 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL (Delaware), Inc.                                |  | 5-3/4% notes due 2009  |  | $34.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $82.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|July 15: 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL
(Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|August 1, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2006 |  | $60.4 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/8% notes due 2008 |  | $18.3 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 10% notes due 2008     |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 9-1/8% notes due 2008  |  | $5.0 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $94.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|August 15, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 10% notes due 2007     |  | $20.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 10-3/4% notes due 2007 |  | $22.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $42.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|September 30, 2002:                                 |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 13-1/4% notes due 2004 |  | $18.9 million
|                                                   
|October 1, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $9.3 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% notes due 2010 |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|October 15, 2002:                                   |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes 2011      |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million

45



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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Interest payments of $18.9 million were made, when due, on April 2, 2002 in
respect of the Diamond Cable Communications 13.25% senior discount notes due
2004. Upon emerging from Chapter 11, NTL intends to make any required interest
payments on the notes of Diamond Holdings Limited. In accordance with the Plan,
NTL will not make future interest payments on its currently outstanding
publicly traded notes except notes issued by NTL (Triangle) LLC (a non-debtor)
and, upon emergence from Chapter 11, Diamond Holdings Limited.

If the applicable issuer does not pay interest on these notes after a 30 day
grace period expires there is an event of default under the indenture in
respect of the notes on which the interest is due and unpaid. An event of
default entitles the trustee under the indenture or the holders of 25% of the
outstanding notes to declare the principal amount of those notes to be
immediately due and payable. Even if the maturity of those notes is not
accelerated after the 30 day grace period, such an event of default would also
result in an event of default in respect of other debt (commonly called cross
defaults) under most of NTLs other notes. Therefore, there was an event of
default for failure to pay interest on May 1, 2002 under the indentures
relating to the missed interest payments due April 1, 2002 and on May 16, 2002,
under the indentures relating to the missed interest payments due April 15,
2002. As a result, cross defaults occurred under NTLs other indentures at NTL
Communications Corp., NTL (Delaware), Inc., NTL Incorporated and under the UK
credit facilities and under the Cablecom credit facility. This gave holders of
the outstanding series of debt at these entities the right to accelerate
repayment of those debts by declaring the principal amount of the debts to be
immediately due and payable. As a result of the payment defaults as well as the
Debtors voluntary filing under Chapter 11 on May 8, 2002, there is an event of
default under all of NTLs credit facilities and the indentures governing all
of NTLs publicly traded debt, other than debt of NTL (Triangle) LLC. As a
result of the Chapter 11 filings, all of NTLs publicly traded debt, other than
the debt of NTL (Triangle) LLC, became immediately due and payable, pursuant to
the terms of the indentures governing such debt. The automatic stay of section
362 of the Bankruptcy Code prevents the holders of such debt from seeking to
enforce their collection rights under the indentures, except within the context
of the Chapter 11 cases, and even then only with the prior approval of the
Bankruptcy Court. However, NTL has received letters from the agents for the
lenders under the UK credit facilities reserving such lenders rights to
accelerate repayment of the facilities and to enforce the security granted in
respect of the facilities on account of the defaults thereunder, actions which
would not be prohibited by the automatic stay.

Inability to Pay Dividends On or Redeem Preferred Stock

NTL Incorporated failed to declare or pay dividends on its 13% Senior
Redeemable Exchangeable Preferred Stock due on February 15, 2002 in the amount
of $6.0 million, on May 15, 2002 in the amount of $6.2 million and on August
15, 2002 in the amount of $6.4 million. NTL Incorporated did not pay dividends
on its 5% cumulative participating convertible preferred stock held by France
Telecom on December 31, 2001 of $37.0 million, on March 31, 2002 of $37.5
million, on June 30, 2002 of $38.0 million and on September 30, 2002 of $38.4
million, or on its cumulative convertible preferred stock held by France
Telecom and a group of commercial banks on December 31, 2001 of $24.9 million,
on March 26, 2002 of $24.1 million, on June 30, 2002 of $42.1 million and on
September 30, 2002 of $41.2 million. Historically, payment of dividends has
been made in additional shares of preferred stock in the case of the 13%
preferred stock, the 5% cumulative participating preferred stock and the
cumulative convertible preferred stock. NTL Incorporated did not pay these
dividends due to a lack of available surplus under Delaware law. Under Delaware
law, NTL Incorporated cannot declare or pay dividends on or redeem its capital
stock, including its preferred stock, unless it has available surplus.

Pursuant to the terms of the 13% preferred stock, the unpaid dividends will
continue to accrue without interest until declared and paid. Pursuant to the
terms of the 5% cumulative convertible preferred stock and the cumulative
convertible preferred stock, the unpaid dividends will continue to accrue
without interest until declared and paid, together with an additional cash
dividend on the amount so unpaid at a rate of 2% per quarter for as long as the
dividends remain unpaid. The failure to declare these dividends is not a
default under any of NTLs existing agreements. With respect to the 13%
preferred stock and 5% cumulative convertible preferred stock, if dividends
remain unpaid for six quarters, the holders of each such series shall have the
right to vote separately as a class on all matters voted on by NTL Incorporated
shareholders and shall have the right, along with other holders of preferred
stock with similar default voting rights, to elect two additional directors to
NTL Incorporateds board. Pursuant to the Plan, all of these securities and
the related rights of the securities holders will be extinguished upon
effectiveness of the Plan.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

In addition, the lack of available surplus meant that NTL Incorporated was not
able to redeem its Variable Coupon Redeemable Preferred Stock, Series A, which
is referred to as the Noos One Year Preferred, held by France Telecom, when it
became mandatorily redeemable on May 18, 2002. Because NTL Incorporated failed
to redeem the Noos One Year Preferred on May 18, 2002, pursuant to the
certificate of designation governing the Noos One Year Preferred, the holders
of such preferred stock have the right, along with other holders of preferred
stock with similar default voting rights, to elect two additional directors to
NTL Incorporateds board and shall have the right to vote separately as a
class, on all matters brought to NTL Incorporated shareholders. Pursuant to
the Plan, all of these securities and the related rights of the securities
holders will be extinguished when the Plan is consummated.

At the time of issuance of the Noos One Year Preferred, NTL Incorporated
pledged its shares of Noos to France Telecom to secure the mandatory redemption
obligation under the Noos One Year Preferred and the 6.5% Redeemable Preferred
Stock. Under the Plan and pursuant to this pledge, NTL will transfer its 27%
interest in Noos to France Telecom.

Credit Rating Downgrades

On April 3, 2002, credit rating agency Standard & Poors lowered the long-term
corporate credit rating on some of NTLs public debt to D from CCC-, citing
NTLs failure to make a bond interest payment due on April 1, 2002.

Delisting of NTL Incorporated Common Stock

On March 28, 2002, the New York Stock Exchange (NYSE) announced that it was
suspending NTL Incorporateds common stock from trading on the NYSE, which was
followed by the delisting of NTL Incorporateds common stock. NTL
Incorporateds common stock is currently quoted on the Over the Counter
Bulletin Board under the symbol NTLDQ.OB. Pursuant to the Plan, NTL
Incorporateds currently outstanding common stock will be cancelled upon
effectiveness of the Plan. The common stock and Series A warrants of New NTL
have been conditionally approved to trade on the Nasdaq National Market. The
common and preferred stock of NTL Euroco have not been approved to trade on any
exchange.

Sale of NTL Australia

On April 2, 2002, NTL announced that it had completed the previously announced
sale of its Australian broadcast business to Macquarie Communications
Infrastructure Holding Pty Limited for A$850 million (US$451.3 million). The
net proceeds from the sale were approximately A$575.3 million (US$304.5
million). At that time, the business bank debt outstanding totaled A$227.3
million (US$121.7 million).

On April 5, 2002, NTL (Delaware), Inc. loaned £90 million to NTL (UK) Group
Inc., which loan was funded by the proceeds of the sale of NTL Australia. This
loan is subordinated to NTLs UK credit facilities. Upon effectiveness of the
Plan, the £90 million note will be sold to Communications Cable Funding Corp.
for consideration comprising the principal amount plus accrued interest on the
note. The remaining proceeds of the sale of NTL Australia remain at NTL
(Delaware), Inc., and the Plan anticipates that such proceeds will form a
portion of the consideration to be offered to bondholders of NTL (Delaware),
Inc. and NTL Incorporated in satisfaction of their claims against those
companies.

Potential Sale of, or Outside Investment in, Cablecom

Under the terms of the agreement reached with its lenders, NTL Cablecom Holding
GmbH and/or Cablecom and/or NTL (Delaware), Inc. have agreed to approve any
outside investment in, or sale of all or a part of, the Cablecom Group, which
is acceptable to the Cablecom lenders.

Under an agreement made between the Cablecom lenders and NTL, if a sale of all
or a part of the Cablecom Group is consummated on or before August 31, 2003,
the Cablecom lenders will be entitled to receive additional interest equal to
20% of the net proceeds of such a sale after repayment of the amounts
outstanding under the Cablecom credit facility and related finance documents
and other expenses and taxes of the sale.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

There can be no assurance that any outside investment in, or sale of all or a
part of, the Cablecom group pursuant to the Cablecom credit facility will be
possible on terms that are acceptable to the Cablecom lenders and/or favorable
to NTL (or, if the Plan is consummated, NTL Euroco). In particular, in the
current environment, there may be little or no value to NTLs shareholding in
the Cablecom group, which may result in NTL (or, if the Plan is consummated,
NTL Euroco) receiving little or no consideration for its equity interest in the
Cablecom group. Further, if a third party makes an investment in the Cablecom
group there can be no assurance that NTL (or, if the Plan is consummated, NTL
Euroco) will be able to maintain its power to direct the management of the
Cablecom group.

Cablecom will become a part of NTL Euroco following the consummation of the
Plan. Accordingly, if Cablecom is sold, assuming consummation of the Plan, NTL
Eurocos principal assets would be limited to Premium TV Limited and certain
minority holdings.

Investments in and Loans to Affiliates

On April 15, 2002, a funding request for approximately $20 million was received
by NTL under the terms of the investment agreement relating to NTLs investment
in B2. NTL informed B2 and the other principal investors that it was not in a
position to comply with this request for funding. The B2 investment agreement
provides that if NTL fails to provide such funding, it might be sued for
non-payment and arguably could lose certain rights under the B2 shareholders
agreement. Pursuant to the applicable documents, if this occurs the majority
remaining shareholders may also elect to terminate the B2 shareholders
agreements with respect to NTL and exercise a contractual right to acquire on a
pro rata basis NTLs interest in B2 at 25% of fair market value. If the
remaining shareholders were able and elected to exercise these rights, NTL
could be forced to sell its stake in B2 at a loss. On October 4, 2002, NTL
filed a motion with the Bankruptcy Court to reject the B2 investment agreement
and shareholders agreements under section 365 of the Bankruptcy Code, and the
Bankruptcy Court subsequently authorized NTLs rejection of the agreements. On
November 8, 2002, B2 and the remaining shareholders filed proofs of claim with
the Bankruptcy Court asserting their right to recover: (1) more than $20
million from NTL in respect of the unpaid funding request, (2) unspecified
damages for NTLs failure to perform under the relevant agreements, and (3)
unspecified costs and expenses incurred in the exercise of their remedies under
the agreements. Additionally, B2 and the remaining shareholders reserved their
rights to avail themselves of any remedies under the investment and
shareholders agreements and to take any actions to acquire NTLs interest in
B2, as described above. NTL intends to object to the proofs of claim filed by
B2 and the remaining shareholders. The Bankruptcy Court will adjudicate the
claims of B2 and the remaining shareholders and NTLs defenses thereto. Upon
consummation of the Plan, NTL Euroco will succeed to the rights and obligations
of NTL described in this paragraph.

Premium TV Limited, a wholly-owned subsidiary of NTL (Delaware), Inc., is
obliged to provide funding of up to approximately £19.0 million ($29.8 million)
to fund various of its joint venture interests. Of this amount, the payment of
approximately £4.0 million ($6.3 million) has been guaranteed by NTL
(Delaware), Inc. If Premium TV Limited fails to provide its committed funding
under the relevant shareholder arrangements relating to these joint ventures,
Premium TV Limited and, in respect of the guaranteed amounts, NTL (Delaware),
Inc., may be sued for non-payment. As a result of the recapitalization process,
the relevant joint venture partners may assert that they can compulsorily
acquire Premium TV Limiteds interest in the relevant joint venture at a third
party appraisal valuation. Premium TV Limited is currently in discussions with
certain of these joint venture partners with a view to restructuring the
relevant joint ventures. In the event that these discussions do not reach a
resolution acceptable to Premium TV Limited, Premium TV Limited may seek to
discontinue these joint ventures and terminate their activities. NTL believes,
however, that it has various defenses and protections under the Bankruptcy Code
against such actions and intends to enforce vigorously its rights and
protections.

On September 24, 2002, Premium TV Limited, NTL (Delaware), Inc. and NTL
Incorporated agreed to vary the terms of the long-term joint venture (referred
to as the Football League Joint Venture) between Premium TV Limited and the
Football League Limited. Under the terms of the variation, upon the payment of
arrears of rights fees by Premium TV Limited, the Football League Limited
agreed to release Premium TV Limited from its obligation to fund the payment of
any further rights fees to the Football League Limiteds member teams and its
obligation to provide working capital funding to the Football League Joint
Venture. The Football League Limited also agreed to release NTL (Delaware),
Inc. from its guarantee of Premium TV Limiteds obligations and to release NTL
Incorporated from the related undertaking. In return, Premium TV Limited
agreed to waive repayment of loan capital by the Football League Joint Venture
and to provide certain ongoing services to the Football League Joint Venture
free of charge for an initial period. NTL (Delaware), Inc. deposited £10.33
million into a designated single purpose account for use by Premium TV Limited
to finance the provision of such services. Premium TV Limited and the Football
League Limited also agreed to new terms relating to the distribution of
revenues generated by the Football League Joint Venture. Following
consummation of the Plan, Premium TV Limited will be an asset of NTL Euroco.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

On November 12, 2002, three of NTL Incorporateds wholly owned subsidiaries
entered into a support agreement with the other limited partners of eKabel
L.P. (the investment partnership through which NTL holds its equity stake in
iesy), an informal committee holding in excess of a majority of the principal
amount of the high-yield bonds of iesy and the NTL employees who have been
seconded to work for iesy. At this time, the iesy companies are not parties to
the support agreement, however the support agreement permits them to become
parties at any time. The support agreement contemplates an in-or out-of-court
restructuring of iesy Hessen GmbH and its subsidiaries. If the iesy
restructuring is completed as contemplated by the support agreement, Brigadoon
Ventures (one of the NTL subsidiaries) will receive a cash facilitation fee for
its cooperation in the iesy restructuring (not in respect of its equity stake
in iesy) of approximately $1.3 million, less its pro rata share of expenses
incurred at the eKabel partnership level. If the iesy restructuring is
completed and the cash facilitation fee is paid to Brigadoon Ventures, NTL
would no longer have any equity stake or other investment in iesy and would
receive no consideration for its equity stake in iesy. The support agreement
imposes certain obligations on the parties, including restricting transfer of
interests in iesy during the process, terminating the existing consulting
agreement between NTL and iesy, and reimbursing NTL for the secondment of NTL
employees. If the support agreement is terminated or the iesy restructuring is
not otherwise completed as contemplated by the support agreement, it is likely
NTL Europe would receive little, if any, value for its equity stake in the iesy
companies.

Relationships with Suppliers

The uncertainty over NTLs financial condition may adversely affect its
relationships with its suppliers. If NTLs suppliers become increasingly
concerned about its financial condition, they may demand quicker payment terms
or not extend normal trade credit, both of which could further adversely affect
its results of operations, financial condition and cash flows.

Defaults under Indebtedness

Set forth below is a non-comprehensive description of defaults, as well as
whether such defaults have led to an event of default or acceleration of
indebtedness, with respect to our preferred stock, our bank facilities and our
outstanding notes, each as of May 8, 2002, the date of the Chapter 11 filings
of the Debtors. As a consequence of the Chapter 11 filings on May 8, 2002, all
amounts outstanding under the indentures governing the high yield and
convertible debt of the entities having commenced Chapter 11 cases
automatically became immediately due and payable. However, the automatic stay
of section 362 of the Bankruptcy Code serves to prevent the holders of such
debt from seeking to enforce their collection rights under the indentures,
except within the context of the Chapter 11 cases, and even then only with the
prior approval of the Bankruptcy Court.

Preferred Stock

|   |  |                                                                            |  |                     |  |                                                                                                                           |  |                    
|-- |  | -------------------------------------------------------------------------- |  | ------------------- |  | ------------------------------------------------------------------------------------------------------------------------- |  | -------------------
|   |  |                                                                            |  | Liquidation         |  |                                                                                                                           |  | Event of default/  
|   |  |                                                                            |  | preference (as of   |  | Defaults                                                                                                                  |  | acceleration       
|   |  |                                                                            |  | September 30, 2002) |  | (as of May 8, 2002)                                                                                                       |  | (as of May 8, 2002)
|   |  |                                                                            |  |                     |  |                                                                                                                           |  |                    
|   |  | NTL Incorporated                                                           |  |                     |  |                                                                                                                           |  |                    
|  
|  
|  
|  
|1. |  | 13% Senior
Redeemable
Exchangeable
Preferred Stock due
February 15, 2009   |  | $205.6 million      |  | Failure to pay $6.0
million of
dividends payable
February 15, 2002                                                        |  | n.a.               
|  
|  
|  
|  
|2. |  | 5% Cumulative
Convertible
Preferred Stock                                  |  | $3,101.8 million    |  | Failure to pay
$24.9 million of
dividends payable
December 31, 2001
and $24.1 million
of dividends
payable March 26,
2002 |  | n.a.               
|  
|  
|  
|  
|3. |  | 5% Cumulative
Participating
Convertible
Preferred Stock due
March 27, 2009 |  | $2,127.1 million    |  | Failure to pay
$37.0 million of
dividends payable
December 31, 2001
and $37.5 million
of dividends
payable March 31,
2002 |  | n.a.               
|  
|  
|  
|  
|4. |  | Variable Coupon
Redeemable
Preferred Stock                                 |  | $502.5 million      |  | None                                                                                                                      |  | n.a.               
|  
|  
|  
|  
|5. |  | 6.5% Fixed Coupon
Redeemable
Preferred Stock                               |  | $132.3 million      |  | None                                                                                                                      |  | n.a.               

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Credit Facilities

|   |  |                          |  |                                            |  |                                                                                                                                                                |  |                                                                                      |  |  |  | 
|-- |  | ------------------------ |  | ------------------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------ |  |  |  | 
|   |  |                          |  | Amount                                     |  |                                                                                                                                                                |  |                                                                                      |  |  |  | 
|   |  |                          |  | available/amount                           |  |                                                                                                                                                                |  | Event of default/                                                                    |  |  |  | 
|   |  |                          |  | outstanding (as of                         |  | Defaults                                                                                                                                                       |  | acceleration                                                                         |  |  |  | 
|   |  |                          |  | September 30, 2002)                        |  | (as of May 8, 2002)                                                                                                                                            |  | (as of May 8, 2002)                                                                  |  |  |  | 
|   |  |                          |  |                                            |  |                                                                                                                                                                |  |                                                                                      |  |  |  | 
|   |  | NTLCL                    |  |                                            |  |                                                                                                                                                                |  |                                                                                     
|  
|  
|  
|  
|1. |  | Working Capital Facility |  | Nil available
$641.0 million
outstanding   |  | Default
(negotiation with
bondholders with a
view to
rescheduling,
failure to pay
interest on
outstanding notes
after 30-day grace
period, Chapter 11
filings) |  | Event of default
with respect to
entire amount;
lenders can
accelerate entire
amount
|  
|  
|  
|  
|2. |  | Senior Credit Facility   |  | Nil available
$4,372.2 million
outstanding |  | Default
(negotiation with
bondholders with a
view to
rescheduling,
failure to pay
interest on
outstanding notes
after 30-day grace
period, Chapter 11
filings) |  | Event of default
with respect to
entire amount;
lenders can
accelerate entire
amount
|  
|  
|  
|  
|   |  | Cablecom                 |  |                                            |  |                                                                                                                                                                |  |                                                                                     
|  
|  
|  
|  
|3. |  | Term Loan Facility       |  | Nil available
$1,829.5 million
outstanding |  | Default
(negotiation with
bondholders with a
view to
rescheduling,
failure to pay
interest on
outstanding notes
after 30-day grace
period, Chapter 11
filings) |  | Event of default
with respect to
entire amount;
lenders can
accelerate entire       
|  
|  
|  
|  
|4. |  | Revolving Facility       |  | Nil available
$714.9 million
outstanding   |  | Default
(negotiation with
bondholders with a
view to
rescheduling,
failure to pay
interest on notes
after 30-day grace
period, Chapter 11
filings)             |  | Event of default
with respect to
entire amount;
lenders can
accelerate entire
amount

Outstanding Public Notes

|   |  |                                                                                      |  |                      |  |                                                                                                                        |  |                                               
|-- |  | ------------------------------------------------------------------------------------ |  | -------------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|   |  |                                                                                      |  | Amount outstanding   |  |                                                                                                                        |  | Event of default/                             
|   |  |                                                                                      |  | (as of September 30, |  | Defaults                                                                                                               |  | acceleration                                  
|   |  |                                                                                      |  | 2002)                |  | (as of May 8, 2002)                                                                                                    |  | (as of May 8, 2002)                           
|   |  |                                                                                      |  |                      |  |                                                                                                                        |  |                                               
|   |  | NTL Incorporated
(NTL (Delaware), Inc.)
co-obligor                                   |  |                      |  |                                                                                                                        |  |                                               
|  
|  
|  
|  
|1. |  | 5-3/4% Convertible
Subordinated Notes
due June 22, 2011
NTL (Delaware), Inc.         |  | $100.0 million       |  | Payment default of
$2.5 million of
interest due April
15, 2002; Chapter
11 filings  entire
amount outstanding         |  | Event of
default/acceleration
of entire amount
|  
|  
|  
|  
|2. |  | 5-3/4% Convertible
Subordinated Notes
due December 15,
2009
NTL Communications
Corp. |  | $1,200.0 million     |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|  
|  
|  
|  
|3. |  | 12-3/4% Senior
Deferred Coupon
Notes due 2005                                        |  | $277.8 million       |  | Payment default of
$17.7 million of
interest due April
15, 2002; Chapter
11 filings  entire
amount outstanding        |  | Event of
default/acceleration
of entire amount

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|    |  |                                                                  |  |                  |  |                                                                                                                        |  |                                               
|--- |  | ---------------------------------------------------------------- |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|4.  |  | 11-1/2% Senior
Deferred Coupon
Notes due 2006                    |  | $1,050.0 million |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|5.  |  | 10% Senior Notes
due 2007                                        |  | $400.0 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|6.  |  | 9-1/2% Senior
Sterling Notes due
2008, less unamortized
discount |  | $195.8 million   |  | Payment default of
$8.6 million of
interest due April
1, 2002; Chapter 11
filings  entire
amount outstanding          |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|7.  |  | 10-3/4% Senior
Deferred Coupon
Sterling Notes due 2008           |  | $428.4 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|8.  |  | 9-3/4% Senior
Deferred Coupon
Notes due 2008                     |  | $1,193.3 million |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|9.  |  | 9-3/4% Senior
Deferred Coupon
Sterling Notes due 2009            |  | $430.8 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|10. |  | 11-1/2% Senior
Notes due 2008                                    |  | $625.0 million   |  | Payment default of
$35.9 million of
interest due April
1, 2002; Chapter 11
filings  entire
amount outstanding         |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|11. |  | 12-3/8% Senior
Deferred Coupon
Notes due 2008                    |  | $380.6 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|12. |  | 7% Convertible
Subordinated Notes
due 2008                       |  | $489.8 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|13. |  | 9-1/4% Senior Euro
Notes due 2006                                |  | $247.0 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|14. |  | 9-7/8% Senior Euro
Notes due 2009                                |  | $345.8 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|15. |  | 11-1/2% Senior
Deferred Coupon
Euro Notes due 2009               |  | $156.5 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|16. |  | 11-7/8% Senior
Notes due 2010,
less unamortized
discount         |  | $491.5 million   |  | Payment default of
$29.7 million of
interest due April
1, 2002; Chapter 11
filings  entire
amount outstanding         |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|17. |  | 12-3/8% Senior Euro
Notes due 2008,
plus unamortized
discount    |  | $297.1 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount

51



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries

|    |  |                                                                    |  |                  |  |                                                                                                                        |  |                                               
|--- |  | ------------------------------------------------------------------ |  | ---------------- |  | ---------------------------------------------------------------------------------------------------------------------- |  | ----------------------------------------------
|18. |  | 6-3/4% Convertible
Senior Notes due
2008                           |  | $1,150.0 million |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|    |  | NTL Triangle                                                      
|   
|   
|   
|   
|19. |  | 11.2% Senior
Discount Debentures
due November 15,
2007             |  | $517.3 million   |  | None                                                                                                                   |  | None                                          
|   
|   
|   
|   
|    |  | Diamond                                                            |  |                  |  |                                                                                                                        |  |                                               
|   
|   
|   
|   
|20. |  | 13-1/4% Senior
Discount Notes due
2004                             |  | $285.1 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|21. |  | 11-3/4% Senior
Discount Notes due
2005                             |  | $531.0 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|22. |  | 10-3/4% Senior
Discount Notes due
2007                             |  | $420.5 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|23. |  | 10% Senior Sterling
Notes due 2008,
issued by Diamond
Holdings plc |  | $211.9 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
amount outstanding                 |  | Event of
default/acceleration
of entire amount
|   
|   
|   
|   
|24. |  | 9-1/8% Senior Notes
due 2008, issued by
Diamond Holdings
plc       |  | $110.0 million   |  | Chapter 11 filings,
failure to pay
interest on
outstanding notes
after 30 day grace
period  entire
amount outstanding |  | Event of
default/acceleration
of entire amount

Description of Outstanding Public Notes, Credit Facilities and Redeemable Preferred Stock

The following summarizes the terms of the significant notes, credit facilities
and redeemable preferred stock issued by the Company and its subsidiaries as of
September 30, 2002. The holders of the debt have the right to accelerate
re-payment, or may have such right, which has caused all of the Companys
long-term debt to be classified as current, except for the long term debt
included in liabilities subject to compromise. The automatic stay of Section
362 of the United States Bankruptcy Code prevents the holders of such debt from
seeking to enforce their collection rights under the indentures, except within
the context of the Chapter 11 cases, and even then only with the prior approval
of the Bankruptcy Court. However, NTL has received letters from the agents for
the lenders under the UK credit facilities reserving such lenders rights to
accelerate repayment of the facilities and to enforce the security granted in
respect of the facilities on account of the defaults thereunder, actions which
would not be prohibited by the automatic stay.

NTL Incorporated:



|(1) |  | Senior Redeemable Exchangeable Preferred Stock due February 15, 2009,
liquidation preference of $205.6 million, dividends accrue at 13% per
annum payable quarterly in arrears, at the Companys option, until
February 15, 2004, dividends may be paid in cash, by the issuance of
additional shares or in any combination of the foregoing, redeemable at
the Companys option on or after February 15, 2002, and, on any dividend
payment date, the Company may exchange all of the outstanding shares for
13% debentures due 2009;
|--- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

52



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries



|(2) |  | Convertible Preferred Stock due March 27, 2009, liquidation preference of
$2,127.1 million, dividends are payable quarterly in arrears in additional
shares, at the following quarterly dividend rates: (i) from September 12,
2001 through March 26, 2002, $13.44 per share, (ii) from March 27, 2002
through March 26, 2003, $21.23 per share, and (iii) from March 27, 2003
through March 26, 2004, $26.61 per share; once the Convertibility Date
(which may be March 27, 2003 or March 27, 2004) is set, the quarterly
dividend rate resets to $16.12 per share and the Convertible Preferred
Stock becomes eligible for conversion into shares of the Companys common
stock beginning on such Convertibility Date, at which time the conversion
price is set at 125% of the immediately preceding 25 trading day
volume-weighted average price of the Companys common stock, subject to
the Companys election to delay convertibility or redeem all issued and
outstanding shares of Convertible Preferred Stock. Holders of Convertible
Preferred Stock other than any commercial bank or their affiliates may at
any time elect, subject to some conditions, to exchange their Convertible
Preferred Stock for up to a 50% interest in an entity holding our Swiss
operations;
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(3) |  | Variable Coupon Redeemable Preferred Stock, liquidation preference of
$502.5 million, dividends are payable quarterly at the Companys option in
cash or additional shares of Variable Coupon Redeemable Preferred Stock,
quarterly dividend rate based on the EURIBOR Rate plus 2.5%, quarterly
dividend rate of 5.95% at June 30, 2002, mandatory redemption in cash on
May 18, 2002. The Companys 27% interest in Noos is pledged to France
Telecom to secure the mandatory redemption obligation under its Variable
Coupon Redeemable Preferred Stock and its 6.5% Fixed Coupon Redeemable
Preferred Stock;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(4) |  | 6.5% Fixed Coupon Redeemable Preferred Stock, liquidation preference of
$132.3 million, dividends are cumulative and are payable in cash upon
redemption, mandatory redemption in cash on May 18, 2007;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(5) |  | 5 3/4% Convertible Subordinated Notes due June 22, 2011, principal amount
at maturity of $100.0 million, interest of 5 3/4% per annum is payable
quarterly from October 15, 2001, redeemable at the option of the Company
on or after December 22, 2007, convertible into shares of the Companys
common stock at a conversion price of $35.00 per share, subject to
adjustment based on the Companys stock price and adjustment to the
conversion price of some series of our preferred stock;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

NTL Delaware:



|(6) |  | 5 3/4% Convertible Subordinated Notes due December 15, 2009, principal
amount at maturity of $1,200.0 million, interest payable semiannually from
June 15, 2000, redeemable at the Companys option on or after December 18,
2002, convertible into shares of the Companys stock at a conversion price
of $108.18 per share;
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

NTLCL:



|(7) |  | Working Capital Facility, originally for £1,300.0 million ($2,041.0
million); following the issuance of new debt beginning in October 2000,
the commitment has been reduced by £882.5 million ($1,385.5 million), of
which £408.3 million ($641.0 million) was outstanding as of September 30,
2002. Interest payable at least every six months at LIBOR plus a margin
rate of 7.00% per annum, which is subject to adjustment; effective
interest rate of 11.26% at September 30, 2002; the unused portion of the
commitment is subject to a commitment fee of 0.75% payable quarterly;
principal is due in full on March 31, 2006; no undrawn amounts are
available under this agreement;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(8) |  | Senior Credit Facility, of which £2,784.8 million ($4,372.2 million) was
outstanding as of September 30, 2002; originally for £2,500.0 million
($3,925.0 million), dated May 30, 2000; interest payable at least every
six months at LIBOR plus a margin rate of 2.00% per annum, which is
subject to adjustment; effective interest rate of 6.26% at September 30,
2002; the unused portion of the commitment is subject to a commitment fee
of 0.75% payable quarterly, which is reduced to 0.50% when over 50% of the
commitment is utilized; principal is due in six quarterly installments
beginning on June 30, 2004; as amended and restated pursuant to a
Restatement Amendment Agreement dated September 26, 2001 which, inter
alia, amended such Senior Credit Facility to make available a £200.0
million ($314.0 million) Term Facility (interest payable on such Term
Facility at least every six months at LIBOR plus a margin rate of 3.50%
per annum, effective interest rate of 7.76% at September 30, 2002,
principal is due in eight quarterly installments beginning on June 30,
2006) and increase the availability of funds under the Senior Credit
Facility by £84.8 million ($133.1 million);

53



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##### Table of Contents



Communications Cable Funding Corp.:



|(9) |  | DIP Facility of $630.0 million, of which $229.0 million was outstanding
at September 30, 2002; interest payable in advance on the first day of
each following month with respect to interest accruing during such month,
each term loan bears interest on the unpaid principal amount for three
months from July 15, 2002 at the rate of 11.00% per annum, with respect to
each successive three month period following that date, the rate per annum
will increase incrementally by 1% over the immediately preceding three
month period but will not exceed 18% per annum for any three month period,
the unused portion of the commitment is subject to a commitment fee of
0.50% payable in advance, on the first day of each following month,
principal and any accrued and unpaid interest is due in full no later that
the earlier of (i) the consummation of the reorganization plan, (ii)
December 1, 2002, and (iii) the date on which all of the term loans
become due and payable in full under the DIP facility agreement, whether
by acceleration or otherwise.
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cablecom:



|(10) |  | Term Loan Facility, of which CHF 2,700.0 million ($1,829.5 million) was
outstanding as of September 30, 2002, interest payable at least every six
months at Swiss LIBOR plus a margin rate of 2.5% per annum, which is
subject to adjustment, effective interest rate of 3.51% at September 30,
2002, principal is due on April 30, 2003;                                                                                                                                                                                                                                                                                                                                                                                                
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(11) |  | Revolving Facility of CHF 1,400.0 million ($948.6 million), of which CHF
1,055.0 million ($714.9 million) was outstanding as of September 30, 2002,
interest payable at least every six months at Swiss LIBOR plus a margin
rate of 2.50% per annum, which is subject to adjustment, effective
interest rate of 3.71% at September 30, 2002, the unused portion of the
commitment is subject to a commitment fee of 0.75% payable quarterly,
which is reduced to 0.50% when over 50% of the commitment is utilized,
principal is due on April 30, 2003; the amount available has been capped
at the CHF 1,055.0 million outstanding although the availability may be
increased with the consent of the requisite majority of the lenders;

NTL Communications:



|(12) |  | 12 3/4% Senior Deferred Coupon Notes due April 15, 2005, principal amount
at maturity of $277.8 million, interest payable semiannually from October
15, 2000, redeemable at the Companys option on or after April 15, 2000;                                 
|---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(13) |  | 11 1/2% Senior Deferred Coupon Notes due February 1, 2006, principal
amount at maturity of $1,050.0 million, interest payable semiannually from
August 1, 2001, redeemable at the Companys option on or after February 1,
2001;                             
|    
|(14) |  | 10% Senior Notes due February 15, 2007, principal amount at maturity of
$400.0 million, interest payable semiannually from August 15, 1997,
redeemable at the Companys option on or after February 15, 2002;                                                
|    
|(15) |  | 9 1/2% Senior Sterling Notes due April 1, 2008, principal amount at
maturity of £125.0 million ($196.3 million), interest payable semiannually
from October 1, 1998, redeemable at the Companys option on or after April
1, 2003;                           
|    
|(16) |  | 10 3/4% Senior Deferred Coupon Sterling Notes due April 1, 2008,
principal amount at maturity of £300.0 million ($471.0 million), interest
payable semiannually beginning on October 1, 2003, redeemable at the
Companys option on or after April 1, 2003;  
|    
|(17) |  | 9 3/4% Senior Deferred Coupon Notes due April 1, 2008, principal amount
at maturity of $1,300.0 million, interest payable semiannually beginning
on October 1, 2003, redeemable at the Companys option on or after April
1, 2003;                           
|    
|(18) |  | 9 3/4% Senior Deferred Coupon Sterling Notes due April 15, 2009,
principal amount at maturity of £330.0 million ($518.1 million), interest
payable semiannually beginning on October 15, 2004, redeemable at the
Companys option on or after April 15, 2004;
|    
|(19) |  | 11 1/2% Senior Notes due October 1, 2008, principal amount at maturity of
$625.0 million, interest payable semiannually from April 1, 1999,
redeemable at the Companys option on or after October 1, 2003;                                                  
|    
|(20) |  | 12 3/8% Senior Deferred Coupon Notes due October 1, 2008, principal
amount at maturity of $450.0 million, interest payable semiannually
beginning on April 1, 2004, redeemable at the Companys option on or after
October 1, 2003;                          

54



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries



|(21) |  | 7% Convertible Subordinated Notes due December 15, 2008, principal amount
at maturity of $489.8 million, interest payable semiannually from June 15,
1999, convertible into shares of the Companys common stock at a
conversion price of $39.20 per share, redeemable at the Companys option
on or after December 15, 2001;
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(22) |  | 9 1/4% Senior Euro Notes due November 15, 2006, principal amount at
maturity of 250.0 million ($247.0 million), interest payable semiannually
from May 15, 2000;                                                                                                                                                            
|    
|(23) |  | 9 7/8% Senior Euro Notes due November 15, 2009, principal amount at
maturity of 350.0 million ($345.8 million), interest payable semiannually
from May 15, 2000, redeemable at the Companys option on or after November
15, 2004;                                                                                          
|    
|(24) |  | 11 1/2% Senior Deferred Coupon Euro Notes due November 15, 2009,
principal amount at maturity of 210.0 million ($207.5 million), interest
payable semiannually beginning on May 15, 2005, redeemable at the
Companys option on or after November 15, 2004;                                                                 
|    
|(25) |  | 11 7/8% Senior Notes due October 1, 2010, principal amount at maturity of
$500.0 million, interest payable semiannually from April 1, 2001,
redeemable at the Companys option on or after October 1, 2005;                                                                                                                  
|    
|(26) |  | 12 3/8% Senior Euro Notes due February 1, 2008; principal amount at
maturity of 300.0 million ($296.4 million), interest payable semiannually
from August 1, 2001;                                                                                                                                                          
|    
|(27) |  | 6 3/4% Convertible Senior Notes due May 15, 2008, principal amount at
maturity of $1,150.0 million, interest payable semiannually from November
15, 2001, convertible into shares of the Companys common stock at a
conversion price of $32.728 per share, redeemable at the Companys option
on or after May 21, 2004;     

NTL Triangle:



|(28) |  | 11.2% Senior Discount Debentures due November 15, 2007, principal amount
at maturity of $517.3 million, interest payable semiannually from May 15,
2001, redeemable at NTL Triangles option after November 15, 2000;
|---- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Diamond:



|(29) |  | 13 1/4% Senior Discount Notes due September 30, 2004, principal amount at
maturity of $285.1 million, interest payable semiannually from March 31,
2000, redeemable at Diamonds option after September 30, 1999;                                                                                         
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(30) |  | 11 3/4% Senior Discount Notes due December 15, 2005, principal amount at
maturity of $531.0 million, interest payable semiannually from June 15,
2001, redeemable at Diamonds option on or after December 15, 2000;                                                                                      
|    
|(31) |  | 10 3/4% Senior Discount Notes due February 15, 2007, principal amount at
maturity of $420.5 million, interest payable semiannually beginning on
August 15, 2002, redeemable at Diamonds option on or after December 15,
2002;                                                                            
|    
|(32) |  | 10% Senior Sterling Notes due February 1, 2008, issued by Diamond
Holdings plc, a wholly-owned subsidiary of Diamond, principal amount at
maturity of £135.0 million ($211.9 million), interest payable semiannually
from August 1, 1998, redeemable at Diamonds option on or after February
1, 2003; and
|    
|(33) |  | 9 1/8% Senior Notes due February 1, 2008, issued by Diamond Holdings plc,
principal amount at maturity of $110.0 million, interest payable
semiannually from August 1, 1998, redeemable at Diamonds option on or
after February 1, 2003.                                                                 

55



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Contractual Obligations and Commercial Commitments

The following table includes aggregate information about the Companys
contractual obligations as of September 30, 2002 and the periods in which
payments are due. The holders of the long-term debt have the right to
accelerate repayment, or may have such right, which has caused all of the
Companys long-term debt to be classified as current, except for the long term
debt included in liabilities subject to compromise. The automatic stay of
Section 362 of the United States Bankruptcy Code prevents the holders of such
debt from seeking to enforce their collection rights under the indentures,
except within the context of the Chapter 11 cases, and even then only with the
prior approval of the bankruptcy court. However, NTL has received letters from
the agents for the lenders under the UK credit facilities reserving such
lenders rights to accelerate repayment of the facilities and to enforce the
security granted in respect of the facilities on account of the defaults
thereunder, actions which would not be prohibited by the automatic stay.

Payments Due by Period

|                                   |  |       |          |        |  |               |         |       |  |         |         |       |  |   |         |  |  |   |          | 
|---------------------------------- |  | ----- | -------- | ------ |  | ------------- | ------- | ----- |  | ------- | ------- | ----- |  | - | ------- |  |  | - | -------- | 
|Contractual                        |  |       |          |        |  | Less than     |         | 1-3   |  | 4-5     |         | After
|Obligations                        |  | Total |          | 1 Year |  | Years         |         | Years |  | 5 Years
|                                   |  |       |          |        |  |               |         |       |  |        
|                                   |  |       |          |        |  | (in millions) |         |       |  |         |         |       |  |  
|Long-Term Debt                     |  | $     | 19,696.1 |        |  | $             | 2,775.9 |       |  | $       | 4,622.5 |       |  | $ | 3,369.0 |  |  | $ | 8,928.7  | 
|                                  
|                                  
|                                  
|                                  
|Capital Lease Obligations          |  |       | 198.5    |        |  |               | 7.1     |       |  |         | 13.9    |       |  |   | 13.2    |  |  |   | 164.3    | 
|                                  
|                                  
|                                  
|                                  
|Operating Leases                   |  |       | 739.1    |        |  |               | 84.2    |       |  |         | 136.8   |       |  |   | 112.7   |  |  |   | 405.4    | 
|                                  
|                                  
|                                  
|                                  
|Unconditional Purchase Obligations |  |       | 1,529.5  |        |  |               | 418.3   |       |  |         | 245.1   |       |  |   | 213.9   |  |  |   | 652.2    | 
|                                  
|                                  
|                                  
|                                  
|Other Long-Term Obligations        |  | none  |          |        |  |               |         |       |  |         |         |       |  |   |         |  |  |  
|                                   |  |       |          |        |  |               |         |       |  |         |         |       |  |   |         |  |  |   |          | 
|Total Contractual Cash Obligations |  | $     | 22,163.2 |        |  | $             | 3,285.5 |       |  | $       | 5,018.3 |       |  | $ | 3,708.8 |  |  | $ | 10,150.6 | 
|                                   |  |       |          |        |  |               |         |       |  |         |         |       |  |   |         |  |  |   |          | 

The following table includes aggregate information about the Companys
commercial commitments as of September 30, 2002. Commercial commitments are
items that the Company could be obligated to pay in the future. They are not
required to be included in the consolidated balance sheet.

Amount of Commitment Expiration Per Period

|                               |  |               |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |   |      | 
|------------------------------ |  | ------------- | ---- | --------- |  | ------------- | ---- | ----- |  | ------- | ---- |  |  | - | --- |  |  | - | ---- | 
|Other Commercial               |  | Total Amounts |      | Less than |  | 1-3           |      | 4-5   |  | Over   
|Commitments                    |  | Committed     |      | 1 year    |  | years         |      | years |  | 5 Years
|                               |  |               |      |           |  |               |      |       |  |        
|                               |  |               |      |           |  | (in millions) |      |       |  |         |      |  |  |  
|Guarantees                     |  | $             | 30.0 |           |  | $             | 3.4  |       |  | $       | 14.2 |  |  | $ | 0.2 |  |  | $ | 12.2 | 
|                              
|                              
|                              
|                              
|Lines of Credit                |  | none          |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |  
|                              
|                              
|                              
|                              
|Standby Letters of Credit      |  | none          |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |  
|                              
|                              
|                              
|                              
|Standby Repurchase Obligations |  | none          |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |  
|                              
|                              
|                              
|                              
|Other Commercial Commitments   |  |               | 46.5 |           |  |               | 23.7 |       |  |         | 18.1 |  |  |   | 4.7 |  |  |   |     | 
|                               |  |               |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |   |      | 
|Total Commercial Commitments   |  | $             | 76.5 |           |  | $             | 27.1 |       |  | $       | 32.3 |  |  | $ | 4.9 |  |  | $ | 12.2 | 
|                               |  |               |      |           |  |               |      |       |  |         |      |  |  |   |     |  |  |   |      | 

Consolidated Statements of Cash Flows

Cash (used in) provided by operating activities was $(97.7) million and $19.1
million in the nine months ended September 30, 2002 and 2001, respectively.
Cash paid for interest exclusive of amounts capitalized in the nine months
ended September 30, 2002 and 2001 was $485.3 million and $771.6 million,
respectively. In addition, the change in cash used in operating activities is
also due to changes in working capital as a result of the timing of receipts
and disbursements.

Purchases of fixed assets were $74.7 million in 2002 and $194.7 million in 2001
as a result of the continuing fixed asset purchases and construction. The
Company expects to continue to minimize purchases of fixed assets in 2002 in an
effort to conserve cash.

Proceeds from borrowings, net of financing costs, of $102.5 million in 2002
includes $114.0 million borrowed under the Cablecom revolving facility, net of
costs of $1.5 million and costs of $10.0 million related to the DIP facility.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Results of Operations

Under the Plan which was confirmed by the Bankruptcy Court on September 5,
2002, NTL will be split into two separate companies, one holding substantially
all of NTLs UK and Ireland assets (referred to as New NTL), and the other
holding various continental European and other assets (referred to as NTL
Euroco). On April 2, 2002, NTL completed the sale of its Australian broadcast
business (referred to as NTL Australia). New NTL and NTL Australia are
accounted for as discontinued operations, and accordingly, they are excluded
from the results of continuing operations for the three and nine months ended
September 30, 2002 and 2001.

Giving effect to the split that will occur when the Plan is consummated, NTL
Eurocos principal wholly-owned subsidiaries include Cablecom in Switzerland
and Premium TV Limited in the UK. NTL Eurocos primary minority-owned
affiliates are Noos in France, iesy in Germany and B2 in Sweden. On November
23, 2001, NTL Eurocos wholly-owned subsidiary that owned its cable business in
France was merged into Noos. Upon consummation of the Plan, our interest in
Noos will be distributed to France Telecom as part of the Plan and in
connection with a pledge of our interest in Noos.

For further information on New NTL, see the Quarterly Report on Form 10-Q of
NTL Communications Corp. for the quarterly period ended September 30, 2002.

There can be no assurance that we will successfully consummate the Plan in a
timely manner in order to sustain our operations.

Cablecoms results of operations in the future are expected to improve due to
the sale of its consumer electronics retail business which was completed in the
fourth quarter of 2002. Although Cablecoms revenues will be reduced, its
operating loss will also be reduced as a result of the sale.

Cablecoms results of operations may be effected by the following. Cablecom is
involved in proceedings before the Swiss Price Regulator who is attempting to
regulate the prices charged for basic television service provided by Cablecom.
Cablecom is currently in negotiations with the Swiss Price Regulator with
respect to a possible settlement of this matter. There can be no guarantee
that these negotiations will be successful. In the event that Cablecom is
unable to reach an acceptable settlement, the Swiss Price Regulator may choose
to issue a final order requiring Cablecom to lower the prices it currently
charges for basic television service. Cablecom believes that it has a number
of alternatives available to it to prevent or delay such a price decrease, and
intends to enforce vigorously these alternatives.

Ongoing reviews of certain balance
sheet accounts by New NTL have indicated that there may be provisions that may
no longer be necessary in light of the resolution of the issues and
other liabilities that such provisions sought to address. The process
of making this determination is expected to be completed in the
fourth quarter of 2002, and could result in at least an approximate
£30 million increase in EBITDA in New NTL for the twelve months ending
December 31, 2002.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires the use of
estimates, assumptions and judgments that have an impact on the assets,
liabilities, revenue and expense amounts reported, as well as disclosures about
contingencies, risk and financial condition. New NTLs determination of the
amount of labor and overhead to capitalize in connection with the design and
installation of fixed assets, and its recording of provision for liabilities,
requires the use of such estimates, assumptions and judgments.

As a result of capital constraints imposed on its business, New NTL has been
engaged in a process of reducing its expenditures in a variety of areas,
including those related to expanding its customer base, and those related to
service arrangements with third parties that provide capital improvements as
part of their services. These measures, as well as the significant
restructuring of New NTLs business in 2002 in terms of headcount reduction and
departmental reorganization, have caused New NTL to reassess whether for some
2002 expenditures, assumptions and estimates relating to the allocation of
those costs between capital and operating expense need to be revised. This study is
not sufficiently complete to book any changes, but is expected to be
completed in the fourth quarter of 2002, and could result
in up to an approximate £45 million increase in expense (and the resulting equivalent reduction in EBITDA and
fixed assets) for the twelve months ending December 31, 2002.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Three Months Ended September 30, 2002 and 2001

Revenues increased by 19.6% to $127.2 million in the three months ended
September 30, 2002, as compared to $106.4 million in the three months ended
September 30, 2001. The increase in revenues is primarily due to improvements
in Cablecoms product offerings, and increases in the number of broadband,
digital television and business customers. The increase in Cablecoms revenues
is also partially a result of non-recurring items including an inventory
sell-off in its consumer electronics retail stores in the three months ended
September 30, 2002. In the three months ended September 30, 2002 and 2001,
Cablecom accounted for 95.4% and 88.7%, respectively of consolidated revenues.
Revenue in the three months ended September 30, 2001 included $3.3 million from
our cable business in France.

Operating expenses (including network expenses) increased to $66.2 million from
$45.7 million primarily as a result of the increases in Cablecoms product
offerings and customers, including digital services and broadband Internet.
The increase in Cablecoms operating expenses is also partially a result of an
inventory sell-off in its consumer electronics retail stores in the three
months ended September 30, 2002. Cablecom accounted for 86.8% and 84.2%,
respectively of consolidated operating expenses.

Selling, general and administrative expenses decreased to $35.5 million from
$44.0 million, which reflects various cost savings efforts including
restructurings announced in the third and fourth quarters of 2001. Selling,
general and administrative expenses as a percentage of revenues decreased to
27.9% in 2002 from 45.8% in 2001.

Other charges of $16.3 million in the three months ended September 30, 2002 are
non-cash charges to write-down certain long-lived assets to their estimated
fair values based on our assessment that their carrying value was not
recoverable. These charges include Cablecom goodwill primarily related to its
consumer electronics retail business of $14.1 million and Premium TV other
assets of $2.2 million. Other charges of $3.3 million in the three months
ended September 30, 2001 were for information technology integration and for
business rationalization consulting.

Corporate expenses decreased to $3.2 million from $11.4 million. Corporate
expenses in 2001 included a write-down of certain investments of $4.0 million.
The remainder of the decrease was due to a decrease in legal, accounting and
other professional fees.

Depreciation expense increased to $53.6 million from $45.0 million primarily
due to an increase in Cablecoms depreciation of telecommunications and cable
television equipment.

Amortization expense decreased to $32.8 million from $97.7 million due to the
adoption of SFAS No. 142 on January 1, 2002 which ended the amortization of
goodwill and other indefinite lived intangible assets. Amortization expense in
the three months ended September 30, 2001, after deducting the amortization of
goodwill and other indefinite lived intangible assets of $82.4 million, would
have been $15.3 million.

Interest expense decreased to $36.3 million from $51.1 million as a result of
the application of AICPA Statement of Position 90-7, Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code (SOP 90-7). Pursuant to
SOP 90-7, interest expense is included in the results of operations only to the
extent that it will be paid during the proceeding or that it is probable that
it will be an allowed priority, secured or unsecured claim. In accordance with
the Plan, we do not intend to make future interest payments on our outstanding
publicly traded notes. Our contractual interest for the three months ended
September 30, 2002 was $62.4 million. The increase in contractual interest
expense in 2002 as compared to 2001 is primarily due to additional borrowings
under credit facilities subsequent to September 30, 2001. Interest of $41.1
million and $54.9 million was paid in cash in the three months ended September
30, 2002 and 2001, respectively.

Share of losses from equity investments increased to $81.4 million from $48.2
million due to a non-cash write-down of the Companys investment in iesy of
$40.6 million in 2002 offset in part by a reduction in net losses of various
investees (including our estimates of their net losses, where applicable). The
Company reduced its investment in iesy based on its assessment that the
carrying value was not recoverable.

Foreign currency transaction gains (losses) were gains of $1.6 million in the
three months ended September 30, 2002 and losses of $5.9 million in the three
months ended September 30, 2001. The change is primarily due to the effect of
changes in exchange rates on receivables denominated in non-U.S. dollar
currencies held by companies whose functional currency is the U.S. dollar.

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Recapitalization items, net was a $10.1 million reversal of expense in the
three months ended September 30, 2002. This reflects a $12.2 million reduction
in our share of the total recapitalization costs incurred in the first half of
2002. NTL expects to incur approximately $26.0 million in additional
recapitalization costs until it completes the process.

Loss from discontinued operations decreased to $279.1 million in the three
months ended September 30, 2002 from $810.2 million in the three months ended
September 30, 2001. Loss from discontinued operations includes NTL
Communications Corp. and subsidiaries losses of $279.3 million and $809.4
million in the three months ended September 30, 2002 and 2001, respectively,
and NTL Australia adjustment to the gain on sale of $0.2 million and loss of
$0.8 million in the three months ended September 30, 2002 and 2001,
respectively. The change in the NTL Communications Corp. and subsidiaries loss
is primarily due to a $271.8 million reduction in amortization expense mostly
as a result of the adoption of SFAS No. 142, and a $202.2 million reduction in
interest expense pursuant to SOP 90-7.

Net loss was $448.8 million and $1,031.5 million in the three months ended
September 30, 2002 and 2001, respectively. This change was the result of the
factors discussed above, particularly the $531.1 million reduction in loss from
discontinued operations.

Nine Months Ended September 30, 2002 and 2001

Revenues increased by 11.2% to $348.3 million in the nine months ended
September 30, 2002, as compared to $313.1 million in the nine months ended
September 30, 2001. The increase in revenues is primarily due to improvements
in Cablecoms product offerings, and increases in the number of broadband,
digital television and business customers. The increase in Cablecoms revenues
is also partially a result of non-recurring items including an inventory
sell-off in its consumer electronics retail stores in the three months ended
September 30, 2002. In the nine months ended September 30, 2002 and 2001,
Cablecom accounted for 92.1% and 89.0%, respectively of consolidated revenues.
Revenue in the nine months ended September 30, 2001 included $9.2 million from
our cable business in France.

Operating expenses (including network expenses) increased to $170.6 million
from $126.6 million primarily as a result of the increases in Cablecoms
product offerings and customers, including digital services and broadband
Internet. The increase in Cablecoms operating expenses is also partially a
result of an inventory sell-off in its consumer electronics retail stores in
the three months ended September 30, 2002. Cablecom accounted for 85.9% and
90.9%, respectively of consolidated operating expenses.

Selling, general and administrative expenses decreased to $120.6 million from
$134.5 million, which reflects various cost savings efforts including
restructurings announced in the third and fourth quarters of 2001. Selling,
general and administrative expenses as a percentage of revenues decreased to
34.6% in 2002 from 43.0% in 2001.

Other charges of $31.9 million in the nine months ended September 30, 2002
include asset impairment charges of $29.1 million and costs incurred by
Cablecom for information technology integration and for business
rationalization consulting of $2.8 million. Other charges of $3.3 million in
the nine months ended September 30, 2001 were incurred by Cablecom for
information technology integration and for business rationalization consulting.
Asset impairment charges of $29.1 million in 2002 are non-cash charges to
write-down certain long-lived assets to their estimated fair values based on
our assessment that their carrying value was not recoverable. These charges
include Cablecom goodwill primarily related to its consumer electronics retail
business of $16.0 million and Premium TV other assets of $13.1 million.

Corporate expenses decreased to $14.4 million from $33.1 million. Corporate
expenses in 2001 included a write-down of certain investments of $9.9 million.
The remainder of the decrease was due to a decrease in legal, accounting and
other professional fees.

Depreciation expense increased to $148.9 million from $121.5 million primarily
due to an adjustment to Cablecoms depreciation of telecommunications and cable
television equipment.

Amortization expense decreased to $69.5 million from $298.4 million due to the
adoption of SFAS No. 142 on January 1, 2002 which ended the amortization of
goodwill and other indefinite lived intangible assets. Amortization expense in
the three months ended September 30, 2001, after deducting the amortization of
goodwill and other indefinite lived intangible assets of $254.2 million, would
have been $44.2 million.

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Interest expense decreased to $133.2 million from $143.3 million as a result of
the application of AICPA Statement of Position 90-7, Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code (SOP 90-7). Pursuant to
SOP 90-7, interest expense is included in the results of operations only to the
extent that it will be paid during the proceeding or that it is probable that
it will be an allowed priority, secured or unsecured claim. In accordance with
the Plan, we do not intend to make future interest payments on our outstanding
publicly traded notes. Our contractual interest for the nine months ended
September 30, 2002 was $167.3 million. The increase in contractual interest
expense in 2002 as compared to 2001 is primarily due to additional borrowings
under credit facilities subsequent to September 30, 2001. Interest of $109.9
million and $132.9 million was paid in cash in the nine months ended September
30, 2002 and 2001, respectively.

Share of losses from equity investments increased to $168.1 million from $141.8
million due to a non-cash write-down of the Companys investment in iesy of
$40.6 million in 2002 offset in part by a reduction in net losses of various
investees (including our estimates of their net losses, where applicable). The
Company reduced its investment in iesy based on its assessment that the
carrying value was not recoverable.

Foreign currency transaction gains (losses) were gains of $6.8 million in the
nine months ended September 30, 2002 and losses of $15.4 million in the nine
months ended September 30, 2001. The change is primarily due to the effect of
changes in exchange rates on receivables denominated in non-U.S. dollar
currencies held by companies whose functional currency is the U.S. dollar.

Recapitalization items, net was $11.6 million in the nine months ended
September 30, 2002 including $0.1 million for employee retention and $12.9
million for financial advisor, legal, accounting and consulting costs. These
costs are net of $1.4 million of interest earned on accumulated cash since the
Chapter 11 filing on May 8, 2002. NTL expects to incur approximately $26.0
million in additional recapitalization costs until it completes the process.

Loss from discontinued operations decreased to $1,154.7 million in the nine
months ended September 30, 2002 from $2,447.2 million in the nine months ended
September 30, 2001. Loss from discontinued operations includes NTL
Communications Corp. and subsidiaries losses of $1,163.0 million and $2,444.1
million in the nine months ended September 30, 2002 and 2001, respectively, and
NTL Australia gain on sale net of loss from operations of $8.3 million and loss
of $3.1 million in the nine months ended September 30, 2002 and 2001,
respectively. The change in the NTL Communications Corp. and subsidiaries loss
is primarily due to a $906.6 million reduction in amortization expense mostly
as a result of the adoption of SFAS No. 142, and a $243.4 million reduction in
interest expense pursuant to SOP 90-7.

Net loss was $1,610.8 million and $3,103.6 million in the nine months ended
September 30, 2002 and 2001, respectively. This change was the result of the
factors discussed above, particularly the $1,292.5 million reduction in loss
from discontinued operations.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

Certain statements contained herein constitute forward-looking statements as
that term is defined under the Private Securities Litigation Reform Act of
1995. When used herein, the words, believe, anticipate, should, intend,
plan, will, expects, estimates, projects, positioned, strategy,
and similar expressions identify such forward-looking statements. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause the actual results, performance or achievements of
the Company, or industry results, to be materially different from those
contemplated, projected, forecasted, estimated or budgeted, whether expressed
or implied, by such forward-looking statements. Such factors include, among
others, those set forth under the caption Risk Factors in this Form 10-Q as
well as: the ability of the Company to continue as a going concern, the ability
of the Company to obtain trade credit and shipments and terms with vendors and
service providers for current orders; the Companys ability to maintain
contracts that are critical to its operations; potential adverse developments
with respect to the Companys liquidity or results of operations; the ability
to fund and execute its business plan; the ability to attract, retain and
compensate key executives and associates; the ability of the Company to attract
and retain customers; general economic and business conditions, technological
developments, the Companys ability to continue to design networks, install
facilities, obtain and maintain any required governmental licenses or approvals
and finance construction and development, all in a timely manner at reasonable
costs and on satisfactory terms and conditions, as well as assumptions about
customer acceptance, churn rates, overall market penetration and competition
from providers of alternative services, the impact of restructuring and
integration actions, the impact of new business opportunities requiring
significant up-front investment and interest rate and currency exchange rate
fluctuations. We assume no obligation to update the forward-looking statements
contained herein to reflect actual results, changes in assumptions or changes
in factors affecting such statements.

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Recent Accounting Pronouncements

On July 30, 2002, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 146, Accounting for
Costs Associated with Exit or Disposal Activities. SFAS No. 146 replaces
Emerging Issues Task Force Issue No. 94-3 Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring). SFAS No. 146 requires that a
liability for costs associated with an exit or disposal activity is recognized
when the liability is incurred. Under Issue No. 94-3, a liability for an exit
cost as defined is recognized at the date of a commitment to an exit or
disposal plan. SFAS No. 146 is effective for exit or disposal activities that
are initiated after December 31, 2002. The adoption of this standard is not
expected to have a significant effect on the results of operations, financial
condition or cash flows of the Company.

In April 2002, the FASB issued SFAS No. 145, Recession of FASB Statements No.
4, 44 and 64, Amendment of FASB Statement No. 13, and Technical Corrections,
which is effective for the Company on January 1, 2003. The adoption of SFAS
No. 145 will require any gain or loss recognized on the extinguishment of debt
to be classified as income or loss from continuing operations. Prior to SFAS
No. 145, gain or loss from the extinguishment of debt was classified as an
extraordinary item.

In August 2001, the FASB issued SFAS No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets, effective for the Company on January 1, 2002.
This Statement superceded SFAS No. 121, Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of and other
related accounting guidance. The adoption of this new standard had no
significant effect on the results of operations, financial condition or cash
flows of the Company, except that it required the Company to treat NTL
Australia as a discontinued operation beginning in the first quarter of 2002.

In June 2001, the FASB issued SFAS No. 143, Accounting for Asset Retirement
Obligations, effective for the Company on January 1, 2003. This Statement
addresses financial accounting and reporting for obligations associated with
the retirement of tangible fixed assets and the associated asset retirement
costs. The Company is in the process of evaluating the financial statement
impact of the adoption of SFAS No. 143.

In June 2001, the FASB issued SFAS No. 141, Business Combinations, and No.
142, Goodwill and Other Intangible Assets. SFAS No. 141 requires that the
purchase method of accounting be used for all business combinations initiated
after June 30, 2001. Use of the pooling-of-interests method is no longer
permitted. SFAS No. 141 also includes guidance on the initial recognition and
measurement of goodwill and other intangible assets acquired in a business
combination that is completed after June 30, 2001. SFAS No. 142 ends the
amortization of goodwill and indefinite-lived intangible assets. Instead, these
assets must be reviewed annually (or more frequently under certain conditions)
for impairment in accordance with this statement. This impairment test uses a
fair value approach rather than the undiscounted cash flow approach previously
required by SFAS No. 121, Accounting for the Impairment of Long-Lived Assets
and for Long-Lived Assets to Be Disposed Of. The Company adopted SFAS No. 142
on January 1, 2002. Primarily due to the significant impairment charge that the
Company recorded in 2001, the adoption of this new standard did not have a
significant effect on the results of operations, financial condition or cash
flows of the Company.

Upon the adoption of SFAS No. 142, the Company performed an analysis of its
intangible assets acquired before July 1, 2001 to determine whether they should
be classified and accounted for as part of or separate from goodwill. The
Company reclassified the carrying value of workforce in place included in other
intangibles to goodwill. The Company determined that license acquisition costs
and customer lists should continue to be classified separate from goodwill. The
Company determined that license acquisition costs would no longer be subject to
amortization since they are deemed to have an indefinite useful life. The
Company also determined that no changes in the remaining useful lives of the
customer lists were required.

The Company also performed an evaluation for impairment of its goodwill and
license acquisition costs as of January 1, 2002 and determined that no
impairment charge was required. The Companys next evaluation of impairment
will be the annual test as of October 1, 2002.

Estimated aggregate amortization expense for each of the five succeeding fiscal
years from December 31, 2001 is as follows: $63.9 million in 2002, $63.9
million in 2003, $34.7 million in 2004, $3.1 million in 2005 and $3.1 million
in 2006.

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The following table shows the Companys loss from continuing operations and its
basic and diluted loss from continuing operations per share as adjusted for the
adoption of SFAS No. 142, had SFAS No. 142 been in effect on January 1, 2001
(unaudited) (in millions, except per share data).

|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |       |  
|------------------------------------------------------------------ | ------------------------------ | - | ------------------ | ----- | ----------------- | - | ------ | ----- | ---- | - | ------ | ----- | - | - | ------ | ----- | -
|                                                                   |                                |   | Three Months Ended |       | Nine Months Ended
|                                                                   |                                |   | September 30,      |       | September 30,    
|                                                                   |                                |   |                    |       |                  
|                                                                   |                                |   | 2002               |       | 2001              |   | 2002   |       | 2001
|                                                                   |                                |   |                    |       |                   |   |        |       |     
|(Loss) from continuing operations  as reported                    |                                | $ | (169.7             | )     |                   | $ | (221.3 | )     |      | $ | (456.1 | )     |   | $ | (656.4 | )    
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|Amortization of:                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Goodwill                       |   |                    |      |                   |   |        | 81.9  |      |   |        |      |   |   |        | 253.1 |  
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Other                          |   |                    |      |                   |   |        | 0.5   |      |   |        |      |   |   |        | 1.1   |  
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                   |                                |   |                   |       |                   |   | 82.4   |       |      |   |       |       |   |   | 254.2  |      
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|(Loss) from continuing operations  as adjusted                    |                                | $ | (169.7             | )     |                   | $ | (138.9 | )     |      | $ | (456.1 | )     |   | $ | (402.2 | )    
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|Basic and diluted net (loss) from continuing
operations per share: |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | As reported                    |   | $                  | (0.62 | )                 |   | $      | (1.12 | )    |   | $      | (2.17 | ) |   | $      | (3.21 | )
|                                                                  
|                                                                  
|                                                                  
|                                                                  
|                                                                   | Amortization expense reduction |   |                    |      |                   |   |        | 0.30  |      |   |        |      |   |   |        | 0.92  |  
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      
|                                                                   | As adjusted                    |   | $                  | (0.62 | )                 |   | $      | (0.82 | )    |   | $      | (2.17 | ) |   | $      | (2.29 | )
|                                                                   |                                |   |                    |       |                   |   |        |       |      |   |        |       |   |   |        |      

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk

The Company is exposed to various market risks, including changes in foreign
currency exchange rates and interest rates. Market risk is the potential loss
arising from adverse changes in market rates and prices, such as foreign
currency exchange and interest rates. The Company does not enter into
derivative financial instruments for trading or speculative purposes. The
Company has entered into derivative financial instruments to hedge exposure to
movements in the British pound/U.S. dollar exchange rate and the Euro to
British pound exchange rate, and interest rates related to certain of its
floating interest rate debt. The counterparties are major financial
institutions.

Foreign Exchange Contracts

To the extent the Company obtains financing in U.S. dollars and incurs
construction and operating costs in various other currencies, the Company will
encounter currency exchange rate risks. Furthermore, the Companys revenues are
generated in foreign currencies while its interest and principal obligations
with respect to most of its existing indebtedness are payable in U.S. dollars.

In 2001, the Company entered into a British pound forward exchange agreement
consisting of twenty-six accumulating forward contracts to reduce its exposure
to movement in the British pound/U.S. dollar exchange rate in accordance with
its market risk strategies. In March 2002, this agreement was closed out, and
the Company received cash of £0.5 million.

The Company had cross currency swaps to hedge exposure to movements in the Euro
to British pound exchange rate. In May 2002, the Company closed out its cross
currency swaps for a cash payment of $2.0 million, and recognized a loss of
$2.0 million.

Interest Rates

The fair market value of long-term fixed interest rate debt and the amount of
future interest payments on floating interest rate debt are subject to interest
rate risk. Generally, the fair market value of fixed interest rate debt will
increase as interest rates fall and decrease as interest rates rise.

In 2001, the Company entered into interest rate swaps, with a notional amount
of £100.0 million, to hedge exposure to the floating rate indebtedness incurred
under the NTLCL £200.0 Term Facility. In March 2002, these swaps were sold, and
the Company received cash of £0.2 million.

At September 30, 2002, the Company had zero cost collars, with a notional
amount of CHF 1,200.0 million, to hedge exposure to the floating interest rate
indebtedness incurred under the Cablecom term loan facility and revolving loan
facility.

The following table provides information about the Companys long-term fixed
and floating interest rate debt and derivative financial instruments that are
sensitive to changes in interest rates and foreign currency exchange rates.

63



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries

NTL INCORPORATED AND SUBSIDIARIES



|                                                               |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |        |  
|-------------------------------------------------------------- | ----------------------------- | - | ---------- | ----- | ---------- | ----------- | ---------- | ----- | -------- | ----- | --------- | ------ | --------- | ----- | --------- | -------- | - | ----- | --------- | ------ | -
|                                                               |                               |   | Three      |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |          
|                                                               |                               |   | Months     |       | Year       |             | Year       |       | Year     |       | Year     
|                                                               |                               |   | Ending     |       | Ending     |             | Ending     |       | Ending   |       | Ending   
|                                                               |                               |   | 12/31/02   |       | 12/31/03   |             | 12/31/04   |       | 12/31/05 |       | 12/31/06 
|Long-term Debt Including Current Portion                       |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|                                                              
|U.S. Dollars                                                   |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                               | Fixed Rate                    |   |           |       |            |             |           |       |          | $     | 285.1     |        |           | $     | 808.8     |          |   | $     | 1,050.0   |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             |            |       |          |       |           | 13.25  | %         |       |           | 12.09    | % |       |           | 11.50  | %
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Fixed Rate                    |   |            |      |            |             |            |      |          |       |           |       |           |       |           |         |   |       |           |       |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |        |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |        |  
|                                                              
|                                                              
|                                                              
|                                                              
|Euro                                                           |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Fixed Rate                    |   |            |      |            |             |            |      |          |       |           |       |           |       |           |         |   |       |           | 250.0 |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           | 9.25   | %
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           | .9042  |  
|                                                              
|                                                              
|                                                              
|                                                              
|U.S. Dollars                                                   |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                               | Variable Rate                 | $ | 229.0      |       |            |             |           |       |          |       |          |        |           |       |          |          |   |       |          |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            | 11.00 | %          |             |            |       |          |       |           |        |           |       |           |          |   |       |           |        |  
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |   |            |      |            |             |            |      |          |       |           | £90.0  |           |       |           | £2,494.8 |   |       |           | £408.3 |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               |   |            |       |            |             |            |       |          | LIBOR |           | LIBOR  |           | LIBOR
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             |            |       |          |       | plus 2.0% |        | plus 2.0% |       | plus 7.0%
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |   |            |       |            |             |            |       |          |       |           | 1.4264 |           |       |           | 1.4245   |   |       |           | 1.4265 |  
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |   |            |      |            |             |            |      |          |       |           |       |           |       |           |         |   |       |           | £20.0  |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   | LIBOR
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       | plus 3.5%
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           | 1.4265 |  
|                                                              
|                                                              
|                                                              
|                                                              
|CHF                                                            |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |   |            |      |            |             | CHF3,755.0 |       |          |       |           |        |           |       |           |          |   |       |          
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               |   |            |       |            | Swiss LIBOR |            |       |          |       |           |        |           |       |           |          |   |      
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |   |            |       |            |             | plus 2.5%  |       |          |       |           |        |           |       |           |          |   |       |          
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |   |            |       |            |             |            | .6227 |          |       |           |        |           |       |           |          |   |       |           |        |  
|                                                              
|                                                              
|                                                              
|                                                              
|Interest Rate Derivative Instruments
Related to Long-Term Debt |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|Interest Rate Swaps                                            |                               |   |            |       |            |             |            |       |          |       |           |        |           |       |           |          |   |       |           |       
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Notional CHF Amount           |   | CHF1,200.0 |       | CHF1,200.0 |             | CHF1,200.0 |       |          |      |           |        |           |      |          
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Floor Strike Rate     |   |            | 3.27  | %          |             |            | 3.27  | %        |       |           | 3.27   | %         |       |           |          |   |       |           |        |  
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Cap Strike Rate       |   |            | 5.15  | %          |             |            | 5.15  | %        |       |           | 5.15   | %         |       |           |          |   |       |           |        |  

[Additional columns below]

[Continued from above table, first column(s) repeated]

|                                                               |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|-------------------------------------------------------------- | ----------------------------- | ----- | --------- | ------ | ---------- | - | ------- | ------ | -------- | - | ---------- | -------- | ---------- | - | ------- | -------- | 
|                                                               |                               |       | Year      |        |            |   |         |        |          |   |            |          | Fair      
|                                                               |                               |       | Ending    |        |            |   |         |        |          |   |            |          | Value     
|                                                               |                               |       | 12/31/07  |        | Thereafter |   | Total   |        | 09/30/02
|Long-term Debt Including Current Portion                       |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|U.S. Dollars                                                   |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                               | Fixed Rate                    | $     | 820.5     |        |            | $ | 6,442.1 |        |          | $ | 9,406.5    |          |            | $ | 2,171.1 |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           | 10.38  | %          |   |         | 8.82   | %        |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Fixed Rate                    |       |           |       |            |   |         | £890.0 |          |   |            | £890.0   |            |   |         | £198.6   | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           |        |            |   |         | 10.09  | %        |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |       |           |        |            |   |         | 1.4438 |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|Euro                                                           |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Fixed Rate                    |       |           |       |            |   |         | 860.0 |          |   |            | 1,110.0 |            |   |         | 147.5   | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           |        |            |   |         | 11.14  | %        |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |       |           |        |            |   |         | .9160  |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|U.S.
Dollars                                                   |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable
Rate                 |       |           |        |           |   |         |       |          |   |            | $229.0   |            |   |         | $229.0   | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |       |           |       |            |   |         |       |          |   |            | £2,993.1 |            |   |         | £2,993.1 | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|U.K. Pound                                                     |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |       |           | £40.0  |            |   |         | £140.0 |          |   |            | £200.0   |            |   |         | £200.0   | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               | LIBOR |           | LIBOR  |            |   |         |        |          |   |            |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       | plus 3.5% |        | plus 3.5%  |   |         |        |          |   |            |          |           
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |       |           | 1.4308 |            |   |         | 1.4369 |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|CHF                                                            |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Variable Rate                 |       |           |        |            |   |         |        |          |   | CHF3,755.0 |          | CHF3,755.0
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Interest Rate         |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Forward Exchange Rate |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|Interest Rate Derivative Instruments
Related to Long-Term Debt |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|Interest Rate Swaps                                            |                               |       |           |        |            |   |         |        |          |   |            |          |            |   |         |         
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Notional CHF Amount           |       |           |       |            |   |         |       |          |   | CHF1,200.0 |          | CHF(45.5) 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Floor Strike Rate     |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               | Average Cap Strike Rate       |       |           |        |            |   |         |        |          |   |            |          |            |   |         |          | 

64



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries




ITEM 4. CONTROLS AND PROCEDURES



| | (a) |  | Evaluation of Disclosure Controls and Procedures. The
Companys management, including the Chief Executive Officer and
Chief Financial Officer, have conducted an evaluation of the
effectiveness of the Companys disclosure controls and procedures
(as such term is defined in Rule 13a-14(c) and Rule 15d-14(c) under
the Securities Exchange Act of 1934, as amended (the Exchange
Act)) as of a date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date). Based on that evaluation,
the Chief Executive Officer and Chief Financial Officer have
concluded that, as of the Evaluation Date, the Companys disclosure
controls and procedures are effective in alerting them on a timely
basis to material information relating to the Company (and its
consolidated subsidiaries) required to be included in the Companys
reports filed or submitted under the Exchange Act.
| | --- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | Changes in Internal Controls. Since the Evaluation Date,
there have not been any significant changes in the Companys
internal controls, or in other factors that could significantly
affect such internal controls.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     




Risk Factors

We currently have limited liquidity. If we are unable to consummate the Plan,
and cannot otherwise complete a successful recapitalization, there is
substantial doubt about our ability to continue as a going concern.

We have limited liquidity. We do not currently have access to our historic
sources of liquidity in the capital markets and our credit facilities are
either fully drawn or we are currently unable to access remaining undrawn
amounts. As a consequence of these conditions, we identified the need to
restructure our outstanding debt and/or raise new funds through the
implementation of a recapitalization. The recapitalization is intended to be
effected through consummation of the Plan. On September 5, 2002, the Bankruptcy
Court confirmed the Plan. Consummation of the Plan remains subject to the
satisfaction or waiver of certain conditions.

The successful consummation of the Plan is not assured as it will require NTL
to satisfy certain conditions, including obtaining exit financing, which is not
assured.

The consummation of the Plan is subject to the satisfaction or waiver of
certain conditions set forth in the Plan. Among other things, the most
substantial conditions include obtaining exit financing for New NTL and
obtaining the consent of NTLs UK bank lenders to such financing and to
modifications to the terms of the UK bank facilities acceptable to both NTL and
NTLs official creditors committee. Although we are currently finalizing
negotiations with a group of potential lenders for such an exit facility, there
can be no assurance that we will be able to reach final agreement on terms or
that the requisite agreement to such terms will be obtained from the lenders
under NTLs UK credit facilities. Similarly, there can be no guarantee we will
be able to obtain acceptable modifications to our UK bank facilities. If these
agreements cannot be reached and an alternate source of exit financing cannot
be secured, NTL may not be able to consummate the Plan. If that were to
happen, the Debtors would continue to remain in Chapter 11, and there can be no
assurance that an alternative plan of reorganization could be reached in a
timely manner or at all. Our DIP facility matures on December 1, 2002. In
light of our limited liquidity we could not sustain our current operations in
Chapter 11 for an extended period unless the DIP lenders agreed to extend the
maturity of the DIP facility or an alternative source of financing becomes
available. If a liquidation would then be necessary, there is a risk that the
value of NTL would be eroded to the detriment of some or all NTL stakeholders.

We are in default under our credit facilities.

There are continuing events of default under NTLs UK credit facilities and the
Cablecom credit facility. These events of default entitle the lenders under our
credit facilities to accelerate repayment. We do not have sufficient cash
resources to repay our outstanding indebtedness if it is declared immediately
due and payable. In addition, the lenders could also seek to take control over
the assets over which they hold security.

65



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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries

We did not pay interest due on some of our outstanding notes and we do not plan
to make future interest payments on most of our outstanding notes.

NTL Incorporated, NTL (Delaware), Inc. and NTL Communications Corp. did not
make scheduled interest payments and payments of related fees beginning on
April 1, 2002. Upon emerging from Chapter 11, NTL intends to make any required
interest payments on the notes of Diamond Holdings Limited. In accordance with
the Plan, NTL does not plan to make future interest payments on its currently
outstanding publicly traded notes except notes issued by NTL (Triangle) LLC
and, upon emergence from Chapter 11, Diamond Holdings Limited.

As a result of these payment defaults and as a result of NTLs Chapter 11
bankruptcy filings, there is currently an event of default in respect of all of
NTLs publicly traded notes other than the notes issued by NTL (Triangle) LLC.
As a result of the Chapter 11 filings, this debt is immediately due and
payable.

We have no current availability to borrow under our existing credit facilities.

We have no current ability to borrow under our existing UK credit facilities,
as we have borrowed the full amounts available. With respect to the Cablecom
credit facility, the term tranche is fully drawn and the revolving tranche has
been capped at its utilized amount of CHF 1,055.0 million although the
availability may be increased with the consent of the requisite percentage of
lenders under the facility. The Cablecom credit facility is due to be repaid on
April 30, 2003. Without substantial investment from a third party or further
borrowing, Cablecom will be unable to repay the facility which will have a
material adverse effect on its business.

It is likely we will lose our net operating loss carryforwards for U.S. income
tax purposes in connection with the consummation of the Plan.

Consummation of the Plan, which includes a restructuring of our debt, can be
expected to give rise to cancellation of indebtedness (COD), which in the
course of a proceeding pursuant to Chapter 11, would be non-taxable. If the COD
is non-taxable, we will be required to reduce our net operating loss
carryforwards and other attributes such as capital loss carryforwards and tax
basis in assets by an amount equal to the non-recognized COD. As a result, it
is likely that as a result of the successful consummation of the Plan, we will
have no U.S. net operating loss carryforwards.

Uncertainty over our financial condition may harm our business and our brand name.

Adverse publicity or news coverage regarding our financial condition, our
Chapter 11 bankruptcy filing and potential outcomes of the recapitalization
process could have an adverse effect on parts of our business. Similarly,
negative press about the financial condition of other cable and pay television
operations and alternative telecom carriers in general may effect our
reputation. For example, one of our key strategies is to increase our
penetration of higher value small to medium size enterprises, or SMEs, and
provide increased retail services of bundled voice, data and Internet services
for SMEs. However, due to the negative publicity surrounding our financial
condition and the potential effect of that publicity on our brand name, we may
find it difficult to convince SMEs to take up our services. Even if we
successfully consummate the Plan, there is no assurance that it will not
adversely impact our results of operations or have a long-term effect on our
brand.

In addition, this uncertainty may have adversely affected our relationships
with our suppliers. If suppliers become increasingly concerned about our
financial condition they may demand quicker payment terms or not extend normal
trade credit, both of which could further adversely affect our working capital
position. We may not be successful in obtaining alternative suppliers if the
need arises and this would adversely affect our results of operations.

The recapitalization process has required significant time and resources of our
directors and senior managers, which could adversely affect the operation of
our business.

Our senior managers and directors have needed to spend significant amounts of
their time dealing with the negotiations with bondholders, bank lenders and
other stakeholders in connection with the recapitalization process and it is
likely that they will continue to devote significant amounts of their time to
this process for the foreseeable future, particularly if we are unsuccessful in
consummating the Plan. This has diverted their time and resources from managing
the operations of our business. If our senior managers and directors continue
to spend significant amounts of their time in connection with the
recapitalization process, this may have a negative impact on our operations.

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We have historically incurred losses and generated negative cash flows and we
cannot assure you that we will be profitable in the future.

Historically, construction and operating expenditures and interest costs have
resulted in negative cash flow. We also expect to continue to incur substantial
additional losses. We cannot be certain that we will achieve or sustain
profitability in the future. Failure to achieve profitability has and could in
the future diminish our ability to sustain our operations, obtain additional
required funds and make required payments on any indebtedness we have incurred
or may incur.

Our growth has been curtailed by funding constraints.

We have significantly decreased the amount we are spending on capital
expenditures due to our liquidity constraints and expect to further reduce
capital expenditures during 2003. As a result, we may be unable to increase our
customers in the short term and our near-term revenue and future revenue growth
may be adversely affected. The decrease in capital expenditure is the result of
our need to divert increasing amounts of our financial resources to meet
liquidity requirements during 2003. The decrease in capital spending is in line
with our current strategy of maximizing revenue from our existing customers
rather than increasing our customer base. In our consumer business in the UK,
we expect customers to decrease in 2002 . Difficulties in obtaining additional
funding will likely hamper our ability to connect new customers to our network
and increase our revenue.

One of our key strategies is to reduce customer churn. However there can be no
assurance that we will successfully accomplish this or that our churn rate will
not increase.

We have experienced rapid growth and development in a relatively short period,
either through acquisitions or connecting customers to our network. One of our
biggest challenges as we have grown has been to limit our customer churn and
the successful implementation of our business plan depends upon a reduction in
the percentage of our customers that stop using our services. Factors
contributing to increase of churn during 2001 included the continued
integration of our acquisition of the UK consumer cable television business
from Cable and Wireless plc, the existence of multiple billing systems, the
introduction of digital television and our decision to disconnect some of our
poor paying customers.

In order to reduce churn in the future, we aim to improve our customer service.
This improvement will be difficult to obtain without an integrated billing
system and a customer database across our entire network. We do not as yet have
an integrated billing and operational platform. We are in the process of
integrating our various billing systems and customer databases in an effort to
improve one of the main tools we use to provide customer service. We expect to
substantially complete the project by the fourth quarter of 2003. The total
project cost is estimated to be approximately £63.0 million, of which we have
incurred approximately £14.2 million through September 30, 2002. If the full
integration is not successful, we could experience an adverse effect on
customer service and on our costs of maintaining these systems going forward.

Our ability to reduce churn could also be adversely affected by the recently
launched digital terrestrial television service offered by BskyB and the BBC in
the UK.

Another part of our strategy to reduce churn is an increased take up of
broadband services by our existing customers. If this increased level of take
up does not materialize we may have difficulties in reducing churn levels,
thereby adversely impacting our results of operations.

Failure to successfully market broadband to our existing consumer customer base
will adversely impact our revenue and results of operations.

A significant component of our strategy is to successfully market broadband
products to our existing consumer customer base. We believe that our triple
play offering of telephony, broadband access to the Internet and digital
television will prove attractive to our existing customer base and allow us to
increase our average revenue per user. However, we face significant competition
in these markets, through digital satellite and digital terrestrial television
and through alternative Internet access media, such as DSL offered by BT and
some of our competitors have substantially greater financial and technical
resources than we do. If we are unable to charge prices for broadband services
that are anticipated in our business plan in response to competition or if our
competition delivers a better product to our customers, our results of
operations will be adversely affected.

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One of our subsidiaries is involved in legal proceedings that could have a
significant adverse effect on our cash flows.

National Transcommunications Limited, a wholly-owned indirect subsidiary of NTL
Communications Corp., has been in discussions with Vodafone Limited relating to
the pricing of transmission services which National Transcommunications Limited
has been providing to Vodafone Limited. Thus far the parties have been unable
to agree upon a settlement. Vodafone Limited has commenced proceedings seeking
recovery of amounts which they allege are excess annual rental paid for the
services, and a reduction in the continuing annual rental for the duration of
the transmission contract. It is possible that if such a claim were
successful, it could have an adverse effect on NTLs results of operations,
financial position and cash flows. NTL intends to vigorously defend the claim
and believes that, in the event of litigation, it would have good defenses to
any claim.

We are dependent upon a small number of key personnel.

A small number of key executive officers manage our businesses. The loss of one
or more of these executive officers could have a material adverse effect on us.
We believe that our future success will depend in large part on our continued
ability to attract and retain highly skilled and qualified personnel. We have
not entered into written employment contracts or non-compete agreements with,
nor have we obtained life insurance policies covering most of those key
executive officers. Following consummation of the Plan, New NTL and NTL Euroco
expect to enter into employment agreements with certain of their senior
officers which will include non-compete undertakings and severance payment
provisions.

Our principal businesses are subject to government regulation, including
pricing regulation, and changes in current regulations may adversely affect us.

Our principal business activities in the UK, the Republic of Ireland and
Switzerland and the activities of the companies in which we have investments in
Germany, France and Sweden are regulated and supervised by various governmental
bodies. Changes in laws, regulations or governmental policy or the
interpretations of those laws or regulations affecting our activities and those
of our competitors, such as licensing requirements, changes in price regulation
and deregulation of interconnection arrangements, could have a material adverse
effect on us.

We are also subject to regulatory initiatives of the European Commission.
Changes in EU Directives may reduce our range of programming and increase the
costs of purchasing television programming or require us to provide access to
our cable network infrastructure to other service providers, which could have a
material adverse effect on us.

The telecommunications industry is subject to rapid technological changes and
we cannot predict the effect of any changes on our businesses.

The telecommunications industry is subject to rapid and significant changes in
technology and the effect of technological changes on our businesses cannot be
predicted. Our core offerings may become outdated due to technological
breakthroughs rendering our products out of date. In addition, our business
plan contemplates the introduction of services using new technologies. Cablecom
and the operations in which we have an interest in France, Germany and Sweden
intend to introduce voice over Internet protocol, or VoIP, voice telephony
services across their networks. Customer demand for this service is uncertain
as customers may not readily switch from their current telephony service,
especially if the quality of the service is not or is perceived not to be
comparable to other telephony services. Similarly, our investments in other new
services such as those related to the 3G mobile network may prove premature and
we may not realize anticipated returns on these new products. The cost of
implementation for emerging and future technologies could be significant, and
our ability to fund such implementation may depend on our ability to obtain
additional financing. We cannot be certain that we would be successful in
obtaining any additional financing required.

We do not insure the underground portion of our cable network.

We obtain insurance of the type and in the amounts that we believe are
customary for similar companies. Consistent with this practice, we do not
insure the underground portion of our cable network. Substantially all of our
cable network is constructed underground. Any catastrophe that affects our
underground cable network could result in substantial uninsured losses.

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We are subject to currency risk because we obtain a substantial amount of
financing in U.S. dollars and Euro but generally generate revenues and incur
expenses in other currencies.

We encounter currency exchange rate risks because we generate revenues and
incur construction and operating expenses in other currencies, primarily in
pounds sterling while we pay interest and principal obligations with respect to
most of our existing indebtedness in U.S. dollars and Euro. We cannot assure
you that the hedging transactions we have entered into or any other hedging
transactions we might enter into will be successful or that shifts in the
currency exchange rates will not have a material adverse effect on us. For
example, to the extent that the pound sterling declines in value against the
U.S. dollar and, to a lesser extent, the Euro, and we have not fully hedged
against such declines, the effective cost of servicing our U.S. dollar and Euro
debt will be higher and we will incur currency losses.

We currently do not have surplus available under Delaware law to pay dividends
on or to redeem our capital stock.

Under Delaware law, unless a corporation has available surplus it cannot
declare or pay dividends on or redeem its capital stock, including its
preferred stock. As of and for the year ended December 31, 2001, we have
written down the carrying value of some of our assets, particularly goodwill.
This write down has left us without available surplus under Delaware law and
means that we are unable to declare or pay dividends on or redeem any of our
capital stock, including our preferred stock, until such time as we again have
available surplus. In any event, if the Plan is consummated, all of our
currently outstanding shares of common and preferred stock will be cancelled,
which will result in the extinguishing of the foregoing rights.

We have never paid cash dividends on our common stock. In addition, the payment
of any dividends by us in the future will be at the discretion of our board of
directors and will depend upon, among other things, future earnings,
operations, capital requirements, our general financial condition and the
general financial condition of our subsidiaries.

Furthermore, the indentures governing NTL Communications Corp.s
non-convertible senior notes and the indentures governing the outstanding notes
issued by Diamond Cable Communications Limited, Diamond Holdings Limited and
NTL (Triangle) LLC impose limitations on the payment of dividends to us and
consequently limit amounts available for us to pay dividends on our common
stock. Further, the terms of our subsidiaries credit facilities restrict, and
the terms of other future indebtedness of our subsidiaries may generally
restrict the ability of some of our subsidiaries to distribute earnings to NTL
Incorporated or make other payments to NTL Incorporated. The terms of an exit
facility likely will have similar types of restrictions.

Some provisions of the agreements governing our indebtedness and the
indebtedness of our subsidiaries and certain provisions of NTL Incorporateds
certificate of incorporation could delay or prevent transactions involving a
change of control of NTL.

Provisions of the agreements governing our outstanding indebtedness and the
indebtedness of our subsidiaries, which either require such indebtedness to be
repaid or give the holder the option to require repayment, could have the
effect of delaying or preventing transactions involving a change of control of
NTL and its subsidiaries, including transactions in which stockholders might
otherwise receive a substantial premium for their shares over then current
market prices, and may limit the ability of stockholders of NTL Incorporated to
approve transactions that they may deem to be in their best interest. This
will continue to be the case after consummation of the Plan in relation to both
New NTL and NTL Euroco under the terms of their then outstanding indebtedness.

Our certificate of incorporation and stockholders rights plan contain
provisions which may have the effect, alone or in combination with each other
or with the existence of authorized but unissued common stock and preferred
stock, of preventing or making more difficult transactions involving a change
of control of NTL.

If the Plan is consummated, the certificates of incorporation of the two
resulting companies (New NTL and NTL Euroco) will have similar provisions.

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NTL Incorporated, NTL (Delaware), Inc., NTL Communications Corp., Diamond
Holdings Limited, Diamond Cable Communications Limited and NTL (Triangle) LLC
are holding companies that are dependent upon receipt of sufficient funds from
their subsidiaries or parent companies to meet their obligations  their
ability to access that cash flow may be limited in some circumstances.

NTL Incorporated, NTL (Delaware), Inc., NTL Communications Corp., Diamond Cable
Communications, Diamond Holdings and NTL (Triangle) LLC are holding companies
with no independent operations or significant assets other than investments in
and advances to their respective subsidiaries and affiliated joint ventures.
Each of these companies depends upon the receipt of sufficient funds from their
subsidiaries or their respective parent companies to meet their respective
obligations. The terms of existing indebtedness of their respective
subsidiaries and the laws of the jurisdictions under which those subsidiaries
are organized generally limit the payment of dividends, loan repayments and
other distributions to them, subject in some cases to exceptions that allow
them to service indebtedness in the absence of specified defaults.

Our common stock has been suspended from the New York Stock Exchange due to the
failure to meet the $1 average closing price requirement and the minimum market
capitalization requirements; there may not be a liquid market for our common
stock and our common stock could be a penny stock as that term is defined in
the Exchange Act.

On March 28, 2002, our common stock was suspended from trading on the NYSE,
which was followed by the delisting of NTL Incorporateds common stock. Our
common stock began trading on the over-the-counter bulletin board effective
April 1, 2002, and is currently trading there under the symbol NTLDQ.OB.
However, there can be no assurance that a liquid market will continue to exist
for our common stock on the OTC bulletin board. Pursuant to the Plan, NTL
Incorporateds currently outstanding common stock will be cancelled upon
effectiveness of the Plan.

In addition, on May 9, 2002, Nasdaq Europe halted trading of NTL Incorporateds
common stock pending receipt of information relating to the restructuring
process because of the filing of NTLs Chapter 11 cases. NTL has complied with
this information request, although there can be no assurance that Nasdaq Europe
will (1) not make additional information requests, (2) remove the trading halt
on shares of NTL Incorporateds common stock or (3) not delist shares of NTL
Incorporateds common stock.

Furthermore, as a result of our suspension from the New York Stock Exchange,
our common stock could be a penny stock as that term is defined in the
Exchange Act. Brokers effecting transactions in a penny stock are subject to
additional customer disclosure and record keeping obligations including
disclosure of the risks associated with low price stocks, stock quote
information and broker compensation. In addition, brokers effecting
transactions in a penny stock are also subject to additional sales practice
requirements under Rule 15g-9 of the Exchange Act including making inquiries
into the suitability of penny stock investments for each customer or
obtaining a prior written agreement for the specific penny stock purchase.
Because of these additional obligations, some brokers will not effect
transactions in penny stocks, which could have an adverse effect on the
liquidity of the security and make buying or selling it more difficult.

NTL has received a conditional approval to have the shares of common stock and
Series A warrants of New NTL quoted on the Nasdaq National Market upon
consummation of the Plan. However, this approval is conditioned upon, among
other things, New NTLs ability to meet the $5.00 minimum bid requirement of
the Nasdaq National Market listing requirements on the first day of trading.
There can be no assurance that this requirement will be met, or that in the
future New NTL will be able to meet the continued listing requirements of the
Nasdaq National Market.

NTL currently expects that the NTL Euroco common stock and preferred stock will
not be quoted on any market or listed on any securities exchange. There may be
no trading market for the common stock and preferred stock of NTL Euroco.

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Defense of putative class action suits filed against NTL Incorporated and
certain of its officers could have a negative impact on NTLs businesses.

The putative class action lawsuits filed against NTL Incorporated and certain
of its officers which were commenced by seven of its purported shareholders, on
behalf of certain purchasers of NTL Incorporateds securities, in addition to
another suit filed by a shareholder based on similar allegations, may have a
negative impact on its results of operations and business. Three of these
lawsuits have been voluntarily dismissed with respect to NTL Incorporated
because they were filed subsequent to the commencement of NTLs Chapter 11
cases. The Plan provides for the discharge under the Bankruptcy Code
of all claims arising out of the remaining suits against NTL Incorporated if the Plan is consummated. The
claims arising out of the suits against the individual officers remain and will
not be discharged under the Bankruptcy Code if the Plan is consummated. If the
claims against these officers are not resolved, defense of such suits may
divert the officers time and resources from managing the operations of NTLs
business. If these officers spend significant amounts of time defending these
lawsuits, there may be a negative impact on results of operations and business.

Risk Factors relating to NTL Euroco

If the Plan is consummated, the common stock of NTL Incorporated will be
cancelled and holders of various NTL securities will receive new shares of
common stock of NTL Euroco. Pursuant to the Plan, NTL Euroco will hold the
current continental European assets of NTL as well as certain UK and other
assets. The following describes risks related to the primary continental
European investments of NTL, which will become NTL Eurocos primary assets upon
consummation of the Plan.

Risk Factors relating to Cablecom

Sale of or outside investment in the Cablecom group

As part of the agreement reached with the Cablecom lenders, NTL Cablecom
Holding GmbH and/or Cablecom and/or NTL (Delaware), Inc. have agreed to approve
any outside investment in, or sale of all or a part of, the Cablecom group,
which is acceptable to the Cablecom lenders.

Under such agreement, if a sale of all or a part of the Cablecom group is
consummated on or before August 31, 2003, the Cablecom lenders will be entitled
to receive additional interest equal to 20% of the net proceeds of such a sale
after repayment of the amounts outstanding under the Cablecom credit facility
and related finance documents and other expenses and taxes of the sale.

There can be no assurance that any outside investment in, or sale of all or a
part of, the Cablecom group pursuant to the Cablecom credit facility will be
possible on terms that are acceptable to the Cablecom lenders and/or favorable
to NTL. In particular, in the current environment, there may be little or no
value to NTLs shareholding in the Cablecom group, which may result in NTL
receiving little or no consideration for its equity interest in the Cablecom
group. Further, if a third party makes an investment in the Cablecom group
there can be no assurance that NTL will be able to maintain its ability to
direct the management of the Cablecom group.

If Cablecom is sold, and the Plan has been consummated, NTL Euroco would become
a holding company whose principal assets are Premium TV Limited and certain
minority holdings. NTL Euroco would not have the ability to direct the
management of the minority holdings and there can be no assurance that NTL (or,
in the future, NTL Euroco) will be able to maintain its current shareholdings
in those companies.

Cablecoms growth and its ability to implement its business strategy have been
curtailed by funding restraints

Given NTLs limited liquidity and its reorganization process, Cablecom has had
to considerably reduce the expenditures necessary to implement its business
strategy, resulting in a delay in implementing that strategy. In addition,
Cablecom has had to significantly reduce its expenditures on upgrading its
network, delaying completion of the upgrade program.

Repayment of Cablecom credit facility

Under the terms of the Cablecom credit facility, no further funding is
available to Cablecom without the consent of the Cablecom lenders. The
Cablecom credit facility is repayable on April 30, 2003. Without substantial
investment from a third party or further borrowing, Cablecom would be unable to
meet such a demand, and this would have a material adverse effect on its
business and that of NTL (or, if the Plan is consummated, NTL Euroco).

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There are also currently a number of subsisting events of default which would
entitle the facility agent to demand repayment of the loan and enforce the
security granted to secure that loan. The facility agent has discretion to
take those steps and can be compelled to do so by a group of Cablecom lenders
holding at least 66-2/3% in aggregate of the loan. See Bank Waivers for the
proposal to have the Cablecom lenders waive the outstanding events of default
by the effective date of the Plan.

Cablecom may become overindebted under Swiss law in the future

Under Swiss law, if a companys liabilities exceed its assets, the company will
be deemed to be overindebted. If Cablecom or any of its subsidiaries were to
become overindebted, this would constitute an event of default under the
Cablecom credit facility, which would entitle the lenders to accelerate
repayment. In addition, under Swiss law, the board of directors of an
overindebted company is generally obliged to notify a judge of overindebtedness
so that the judge may either institute insolvency proceedings or postpone such
adjudication and take appropriate measures to preserve the value of the assets.
An overindebted company is not required to notify a judge if the creditors of
the overindebted entity subordinate their claims in the amount of the
overindebtedness. As of December 31, 2001, Cablecoms and seven of its direct
and indirect subsidiaries liabilities exceeded their respective assets, and
those entities were deemed to be overindebted. The problem of overindebtedness
was resolved on June 26 and June 27, 2002 in certain of the overindebted
subsidiaries when they were merged into Cablecom and other members of the
Cablecom group. The remaining overindebted subsidiaries were not merged, but
the overindebtedness issue was ameliorated in those subsidiaries by way of
subordination agreements which obviated any requirement to institute insolvency
proceedings in respect of these companies. Future developments in Cablecoms
business, as well as external factors, could result in a reemergence of the
overindebtedness issue under Swiss law. In particular, the Cablecom credit
facility is due for repayment on April 30, 2003 and it will not be possible to
repay the facility without substantial investment from a third party or further
borrowing.

Proceedings before the Swiss Price Regulator

At present, Cablecom is involved in proceedings before the Swiss Price
Regulator who is attempting to regulate the prices charged for basic television
service provided by Cablecom. Cablecom is currently in negotiations with the
Swiss Price Regulator with respect to a possible settlement of this matter.
There can be no guarantee that these negotiations will be successful. In the
event that Cablecom is unable to reach an acceptable settlement, the Swiss
Price Regulator may choose to issue a final order requiring Cablecom to lower
the prices it currently charges for basic television service. Cablecom
believes that it has a number of alternatives available to it to prevent or
delay such a price decrease, and intends to enforce vigorously these
alternatives. If Cablecom is unsuccessful in its attempt to prevent or delay a
price decrease, however, it will be forced to lower its prices, which may have
a severe negative impact on Cablecoms revenues and may have a material adverse
effect on its business.

Risk Factors relating to NTLs investment in iesy

Additional financing requirements for iesy

iesy may require substantial amounts of additional capital to complete its
network rollouts and upgrades, and its ability to obtain that financing will
depend, in part, on its ability to access the capital markets, which will be
subject not only to the performance of its business and prospects, but to
conditions in the capital markets generally. Further, if iesy were to issue
additional equity securities, it is likely that NTL will not be able to
participate in such issuance, which could lead to substantial dilution. In
addition, there can be no assurance that iesy will meet the conditions
precedent to access additional funds under its credit facility or that it will
be in compliance with the covenants under its debt agreements.

Restructuring of iesy financings

iesy has engaged an advisor to assist it in the restructuring of its capital
structure. There can be no assurance that its restructuring efforts will be
successful. iesy will evaluate on a continuing basis its strategic
alternatives and the most efficient use of iesys capital, including, without
limitation and depending on market conditions, debt and/or equity financing and
purchasing, restructuring, recapitalizing, refinancing or by other means
reducing its debt, in each case subject to the restrictions contained in the
indenture governing iesys notes and its credit facility. Unless iesy is able
to restructure or otherwise refinance its indebtedness, renegotiate its credit
facility, and/or obtain alternative means of financing on acceptable terms,
iesy may not have sufficient funds for the operation of its business or for
payment of interest and principal on its indebtedness as it becomes due, and
iesy may become insolvent. Even if iesys restructuring efforts are
successful, there may be little or no value to NTLs equity investment, which
could be substantially diluted or eliminated.

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On November 12, 2002, three of NTL Incorporateds wholly owned subsidiaries
entered into a support agreement with the other limited partners of eKabel
L.P. (the investment partnership through which NTL holds its equity stake in
iesy), an informal committee holding in excess of a majority of the principal
amount of the high-yield bonds of iesy and the NTL employees who have been
seconded to work for iesy. At this time, the iesy companies are not parties to
the support agreement, however the support agreement permits them to become
parties at any time. The support agreement contemplates an in-or out-of-court
restructuring of iesy Hessen GmbH and its subsidiaries. If the iesy
restructuring is completed as contemplated by the support agreement, Brigadoon
Ventures (one of the NTL subsidiaries) will receive a cash facilitation fee for
its cooperation in the iesy restructuring (not in respect of its equity stake
in iesy) of approximately $1.3 million, less its pro rata share of expenses
incurred at the eKabel partnership level. If the iesy restructuring is
completed and the cash facilitation fee is paid to Brigadoon Ventures, NTL
would no longer have any equity stake or other investment in iesy and would
receive no consideration for its equity stake in iesy. The support agreement
imposes certain obligations on the parties, including restricting transfer of
interests in iesy during the process, terminating the existing consulting
agreement between NTL and iesy, and reimbursing NTL for the secondment of NTL
employees. If the support agreement is terminated or the iesy restructuring is
not otherwise completed as contemplated by the support agreement, it is likely
NTL Europe would receive little, if any, value for its equity stake in the iesy
companies.

iesy may become overindebted under German law in the future

iesy has performed a valuation analysis to determine whether it is
overindebted under German law and concluded that iesy, as a legal entity, was
not overindebted at the end of May 2002. In November 2002, an additional
overindebtedness analysis was commenced. Under German law, if a company is
determined to be overindebted or illiquid it must file insolvency proceedings
within three weeks. If delays occur in the iesy restructuring process or
network upgrade or product introduction or if market acceptance of new products
and services is not as high as expected, future cash flows could be negatively
impacted. iesy has not given any assurances or predictions that it would not
then become insolvent due to overindebtedness or illiquidity in the future.

Risk Factors relating to NTLs Investment in B2

Implications of rejection of NTLs investment agreement with B2

On April 15, 2002, a funding request for approximately $20 million was received
by NTL under the terms of the investment agreement relating to NTLs investment
in B2. NTL informed B2 and the other principal investors that it was not in a
position to comply with this request for funding. The B2 investment agreement
provides that if NTL fails to provide such funding, it might be sued for
non-payment and arguably could lose certain rights under the B2 shareholders
agreement. Pursuant to the applicable documents, if this occurs the majority
remaining shareholders may also elect to terminate the B2 shareholders
agreements with respect to NTL and exercise a contractual right to acquire on a
pro rata basis NTLs interest in B2 at 25% of fair market value. If the
remaining shareholders were able and elected to exercise these rights, NTL
could be forced to sell its stake in B2 at a loss. On October 4, 2002, NTL
filed a motion with the Bankruptcy Court to reject the B2 investment agreement
and shareholders agreements under section 365 of the Bankruptcy Code, and the
Bankruptcy Court subsequently authorized NTLs rejection of the agreements. On
November 8, 2002, B2 and the remaining shareholders filed proofs of claim with
the Bankruptcy Court asserting their right to recover: (1) more than $20
million from NTL in respect of the unpaid funding request, (2) unspecified
damages for NTLs failure to perform under the relevant agreements, and (3)
unspecified costs and expenses incurred in the exercise of their remedies under
the agreements. Additionally, B2 and the remaining shareholders reserved their
rights to avail themselves of any remedies under the investment and
shareholders agreements and to take any actions to acquire NTLs interest in
B2, as described above. NTL intends to object to the proofs of claim filed by
B2 and the remaining shareholders. The Bankruptcy Court will adjudicate the
claims of B2 and the remaining shareholders and NTLs defenses thereto.

Risk Factors relating to the Securities of NTL Euroco if the Plan is
Consummated

NTL Euroco common stock may have little if any equity value and so could be
worthless

THE VALUE OF THE COMMON EQUITY OF NTL EUROCO WILL BE HIGHLY UNCERTAIN. ANY
INVESTMENT IN ITS COMMON STOCK WILL BE HIGHLY SPECULATIVE. There has been a
significant deterioration in valuations of assets similar to the assets which
will be owned by NTL Euroco and those companies in which it will have minority
investments. In addition, the principal companies in which NTL Euroco will
have an interest, namely Cablecom (wholly owned) and iesy and B2 (minority
interests), also have substantial levels of indebtedness.

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Holders of shares of NTL Euroco common stock and preferred stock may have
substantial difficulty in selling those shares

There may be no trading market for the common stock and the preferred stock of
NTL Euroco. The NTL Euroco common stock and preferred stock will not be quoted
on any market or listed on any securities exchange. Prices for the NTL Euroco
common stock and preferred stock may be quoted on the Over-the-Counter Bulletin
Board or the Pink Sheets. However, securities whose prices are quoted on the
Over-the-Counter Bulletin Board or the Pink Sheets do not enjoy the same
liquidity as securities that trade on a recognized exchange. As a consequence,
although prices for the NTL Euroco common stock and preferred stock may be
quoted on the Over-the-Counter Bulletin Board or the Pink Sheets, there may be
limited trading activity in those securities resulting in volatile prices and
difficulty in selling or otherwise disposing of such shares.

The NTL Euroco preferred stock will have a significant preference over the NTL
Euroco common stock

The NTL Euroco preferred stock will have significant rights and preferences
over the NTL Euroco common stock. In addition to entitlement to a mandatory
$25 million redemption payment immediately after the effective date of the
Plan, to the extent unredeemed, in a liquidation of NTL Euroco, holders of
Preferred Stock would be entitled to payment of a liquidation preference in
full before any distribution could be made to holders of NTL Euroco common
stock. In that event, it is likely that there would be no assets available for
distribution to holders of NTL Euroco common stock who would receive no
recovery. The NTL Euroco preferred stock will also have other rights not
available to holders of the NTL Euroco common stock.

NTL Euroco may not be able to pay dividends on or redeem the Preferred Stock

Following the Plans consummation, NTL Euroco may not have available surplus as
determined under Delaware law and thus may be unable to pay dividends on or
redeem any of its capital stock, including the Preferred Stock, unless and
until such time as NTL Euroco has available surplus.

Forced sales of NTL Eurocos assets or restructurings of those assets could
have a detrimental effect on NTL Euroco

NTL Euroco will hold as its assets NTLs continental European assets and its
investments in a number of joint ventures and other companies. Under the terms
of the agreements governing most of these ventures are provisions that, in some
circumstances, could require NTL Euroco to sell or otherwise forfeit its stake
in the venture. In some cases, despite a forced sale or forfeiture, NTL Euroco
(or its applicable subsidiaries) could still be required to fulfill
pre-committed funding obligations. Any such forced sales or forfeitures could
have material adverse consequences to NTL Euroco. Furthermore, a number of
these holdings are currently being restructured and may be sold. Consequently,
they may not bring any material value to NTL Euroco. In addition, the lenders
under the Cablecom credit facility require steps to be initiated towards the
sale of all, or part of, or an investment in, the Cablecom group. There can be
no assurance that any such sale or outside investment in Cablecom will occur on
terms which generate incremental liquidity for NTL Euroco, if at all.

NTL Euroco will have limited liquidity raising substantial doubt about NTL
Eurocos ability to continue as a going concern

NTL Euroco will be a holding company with no independent operations or
significant assets other than its investments in its subsidiaries and
affiliated joint ventures. The terms of existing and future indebtedness of the
respective subsidiaries and affiliated joint ventures and the laws of the
jurisdictions under which those subsidiaries are organized may limit NTL
Eurocos ability to receive payment of dividends, loans and loan repayments and
other distributions from its subsidiaries and affiliated joint ventures. It is
anticipated that NTL Euroco will require substantial financing to continue
operations because, among other things, the Cablecom credit facilities of
$2,544.4 million at September 30, 2002 become repayable on April 30, 2003.
There can be no assurance that NTL Euroco or any of its subsidiaries will be
able to raise sufficient funds to meet their liquidity requirements following
consummation.

Funding obligations with respect to New NTL liabilities

Following the consummation of the Plan, subject to agreement being reached to
the contrary, NTL Euroco (and certain subsidiaries) will continue to guarantee
the obligations of certain companies in New NTL relating to ordinary course
contracts and leasehold property. NTL Euroco can give no assurance that those
companies will meet their obligations under relevant contracts and leases. If
those companies fail to meet their obligations, NTL Euroco may be liable to pay
sums to cover the liability of those companies within the New NTL group.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries




PART II. OTHER INFORMATION




ITEM 1. LEGAL PROCEEDINGS

On May 8, 2002, NTL
Incorporated, NTL (Delaware), Inc., NTL Communications Corp., Diamond
Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed a pre-arranged joint
reorganization plan under Chapter 11 of the United States
Bankruptcy Code (the Plan). NTLs operating
subsidiaries were not included in the Chapter 11 filing. On
September 5, 2002, the United States Bankruptcy Court for the
Southern District of New York confirmed the Plan. The consummation of
the Plan is subject to the satisfaction or waiver of certain
conditions set forth in the Plan.

NTL Incorporated and certain of its
officers have been named as defendants in a number of purported
securities class action lawsuits. The complaints in those cases
generally allege that the defendants failed to accurately disclose
NTLs financial condition, finances and future prospects in
press releases and other communications with investors prior to
filing its Chapter 11 case in federal court. NTL does not know
of any facts that would support these allegations, and defendants
intend to defend the lawsuits vigorously. The cases have been
consolidated for all purposes before the U.S. District Court for the
Southern District of New York. As a result of the voluntary filing of
a petition under Chapter 11 of the United States Bankruptcy
Code, the cases may not currently proceed against the Company itself.
Moreover, the Plan provides for a discharge and for releases that
effectively bar the suits from continuing against the Company
following consummation. However, the executives named in the suits
continue to be defendants in the suits and will continue as such
following consummation.

National Transcommunications Limited,
a subsidiary of NTL Incorporated, has been in discussions with
Vodafone Limited relating to the pricing of transmission services
which National Transcommunications Limited has been providing to
Vodafone Limited. Thus far the parties have been unable to agree on a
settlement. Vodafone Limited has commenced proceedings seeking
recovery of amounts which they allege are excess annual rent paid for
the services, and a reduction in the continuing annual rental for
the duration of the transmission contract. It is possible that if
such a claim were successful, it could have an adverse effect on
NTLs financial position. NTL has instructed solicitors to
vigorously defend the claim and believes that, in the event of
litigation, it would have good defenses to any claim.

The Company is involved in certain
other disputes and litigation arising in the ordinary course of its
business. None of these matters are expected to have a material
adverse effect on the Companys financial position, results of
operations or cash flows.




ITEM 2. CHANGES IN SECURITIES
AND USE OF PROCEEDS

The description of the Plan contained
in Managements Discussion and Analysis under the caption
The Plan sets forth the effect that consummation of the
Plan would have on NTLs outstanding securities.

The description in Managements
Discussion and Analysis under the caption Inability to Pay
Dividends On or Redeem Preferred Stock describes limitations
on NTL Incorporateds ability to pay dividends.




ITEM 3. DEFAULTS UPON SENIOR SECURITIES

DEFAULTS UNDER CREDIT AGREEMENTS

Negotiations with Bondholders

Before the Company could commence negotiations with the unofficial committee of
its bondholders, it was necessary to obtain waivers from the lenders under the
UK credit facilities and the Cablecom credit facility. Effective March 8, 2002,
these lenders granted waivers which, until March 29, 2002, provided that the
commencement of negotiations with bondholders with a view to rescheduling its
debt would not constitute an event of default under the credit facilities. But
for the initial waivers, the commencement of negotiations with bondholders
would have been an event of default under the credit facilities. Effective
March 28, 2002, these lenders agreed to amend the initial waivers to extend the
duration of the initial waivers to April 29, 2002 in the case of the UK credit
facilities or May 14, 2002 in the case of the Cablecom credit facility.

In connection with the granting of these waivers, the Company agreed to various
affirmative obligations with respect to the lenders under the credit facilities
and significant restrictions on its conduct. The amended waivers prevented the
Company from making an exchange offer with respect to its outstanding notes or
from entering into an agreement with bondholders without the consent of the
lenders under each of the credit facilities. The amended waivers also
prohibited the Company from commencing voluntary dissolution proceedings,
including proceedings under Chapter 11 of the United States Bankruptcy Code,
without the consent of these lenders.

As of the date of this Form 10-Q, there are no current waivers from the lenders
under the credit facilities. As a consequence, the Chapter 11 filings resulted
in events of default under NTLs UK credit facilities and the Cablecom credit
facility.

Other Material Defaults in Respect of the Cablecom Credit Facility

During the nine months ended September 30, 2002, there were a number of
technical defaults under the Cablecom credit facility. In addition, as of
December 31, 2001, Cablecoms and various of its subsidiaries liabilities
exceeded their respective assets. As a consequence, under Swiss law, those
entities were deemed to be overindebted. This also constituted an event of
default under the Cablecom credit facility which entitled the lenders to
accelerate repayment. Under Swiss law, unless the overindebtedness was
rectified, those entities would have been required to commence an insolvency
proceeding in Switzerland.

The problem of overindebtedness was resolved on June 26 and June 27, 2002 in
certain of the overindebted subsidiaries when they were merged into Cablecom
and other members of the Cablecom group. The remaining overindebted
subsidiaries were not merged but the overindebtedness issue was resolved in
those subsidiaries by way of subordination agreements which obviated any
requirement to institute insolvency proceedings in respect of these companies.

At the end of April 2002 the defaults subsisting at that time were remedied or
were waived by the restatement of the credit agreement and the grant of a
waiver letter. However, conditions subsequent such as the grant of new security
and the deposit of share certificates relating to minority shareholdings
pledged to the banks were imposed by these documents and other new finance
documents executed pursuant to the restatement.

Since the end of April 2002 the following defaults have occurred under the
Cablecom finance documents: (1) The indentures issued by NTL (Delaware), Inc.
and NTL Incorporated have become payable and have not been paid; (2) NTL
(Delaware), Inc. has commenced negotiations with its creditors with a view to
the general rescheduling of its indebtedness and has commenced proceedings
under Chapter 11 of the United States Bankruptcy Code pursuant to which it
intends to reorganize its debt; (3) NTL (Delaware), Inc. has liabilities which
exceed the value of its assets and is unable to pay its debts as they fall due;
(4) Cablecom was unable to satisfy the conditions to allow it to rollover
revolving advances maturing in early July 2002. The revolving advances remained
unpaid for several days until Cablecom was able to obtain the consent of the
banks to waive the conditions to their rollover; (5) Certain of the conditions
subsequent imposed by the restated credit agreement, the waiver letter and
other finance documents executed pursuant to the restated credit agreement have
yet to be fulfilled.

The outstanding defaults under the Cablecom finance documents entitle the
facility agent to demand repayment of the loan and enforce the security granted
to secure that loan. The facility agent has a discretion to take those steps
and can be compelled to take those steps by a group of banks holding at least
66-2/3% in aggregate of the loan.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Future developments in Cablecoms business, as well as external factors, could
result in a reemergence of the over indebtedness issue under Swiss law.

Missed Interest Payments on NTLs Public Bonds

As a result of the missed interest payments not cured within the 30 day grace
period with respect to certain of NTLs publicly traded bonds (described
below), as of May 1, 2002, there was an event of default under the UK credit
facilities and as of May 16, 2002, there was an event of default under the
Cablecom credit facility.

Chapter 11 Bankruptcy Filing

On May 8, 2002, NTL Incorporated, NTL (Delaware), Inc., NTL Communications
Corp., Diamond Cable Communications Limited, Diamond Holdings Limited and
Communications Cable Funding Corp. filed an arranged joint reorganization plan
under Chapter 11 of the United States Bankruptcy Code. NTLs operating
subsidiaries were not included in the Chapter 11 filing. The Chapter 11 filing
constituted an event of default under the Companys UK credit facilities and
the Cablecom credit facility, allowing the lenders thereunder to declare
amounts outstanding to be immediately payable.

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

DEFAULTS ON HIGH YIELD AND CONVERTIBLE NOTES

Payment Defaults

The Company and its subsidiaries have substantial interest payment obligations
under their existing indebtedness. The Company and its subsidiaries did not
make their scheduled interest payments on the respective due dates as follows:

|                                                    |  |                        |  |              
|--------------------------------------------------- |  | ---------------------- |  | -------------
|April 1, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $8.6 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% noted due 2010 |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|April 15, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|May 15, 2002:                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/4% notes due 2006  |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 6-3/4% notes due 2008  |  | $38.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-7/8% notes due 2009  |  | $15.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $65.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|June 15, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable                                       |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Communications Limited                              |  | 11-3/4% notes due 2005 |  | $31.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 7% notes due 2008      |  | $17.1 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL (Delaware), Inc.                                |  | 5-3/4% notes due 2009  |  | $34.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $82.8 million
|                                                   
|                                                   
|                                                   
|                                                   
|July 15, 2002:                                      |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL
(Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|August 1, 2002:                                     |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2006 |  | $60.4 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/8% notes due 2008 |  | $18.3 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 10% notes due 2008     |  | $10.5 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Holdings Limited                            |  | 9-1/8% notes due 2008  |  | $5.0 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $94.2 million
|                                                   
|                                                   
|                                                   
|                                                   
|August 15, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 10% notes due 2007     |  | $20.0 million
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 10-3/4% notes due 2007 |  | $22.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $42.6 million
|                                                   
|                                                   
|                                                   
|                                                   
|September 30, 2002:                                 |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|Diamond Cable Communications Limited                |  | 13-1/4% notes due 2004 |  | $18.9 million
|                                                   
|October 1, 2002:                                    |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 9-1/2% notes due 2008  |  | $9.3 million 
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-1/2% notes due 2008 |  | $35.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 11-7/8% due 2010       |  | $29.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $74.9 million
|                                                   
|                                                   
|                                                   
|                                                   
|October 15, 2002:                                   |  |                        |  |              
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Communications Corp.                            |  | 12-3/4% notes due 2005 |  | $17.7 million
|                                                   
|                                                   
|                                                   
|                                                   
|NTL Incorporated (NTL (Delaware), Inc., co-obligor) |  | 5-3/4% notes due 2011  |  | $2.5 million 
|                                                   
|                                                   
|                                                   
|                                                   
|                                                    |  | Total                  |  | $20.2 million

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In accordance with the Plan, NTL does
not intend to make future interest
payments on its outstanding publicly traded notes except notes issued by NTL
Triangle and, upon emergence from Chapter 11 proceedings, Diamond Holdings
Limited.

If the applicable issuer does not pay interest on these notes after a 30 day
grace period expires there is an event of default under the indenture in
respect of the notes on which the interest is due and unpaid. Therefore, there
was an event of default for failure to pay interest on May 1, 2002 under the
indentures relating to the missed interest payments due April 1, 2002 and on
May 16, 2002, under the indentures relating to the missed interest payments due
April 15, 2002. As a result, cross defaults occurred under the Companys other
indentures at NTL Communications Corp., NTL (Delaware), Inc., NTL Incorporated
and under the Companys UK credit facilities and the Cablecom credit facility.

Chapter 11 Bankruptcy Filing

The Chapter 11 bankruptcy filing constituted an event at default under the
indentures of each of the entities which made the Chapter 11 filing and amounts
outstanding under these indentures became immediately due and payable. The
automatic stay of Section 362 of the United States Bankruptcy Code prevents the
holders of such debt from seeking to enforce their collection rights under the
indentures, except within the context of the Chapter 11 cases, and even then
only with the prior approval of the Bankruptcy Court.

AGGREGATE AMOUNT OF DEFAULTS

Interest

As a result of the events of default described above, as of May 8, 2002, the
date of the Chapter 11 filings:



| |  | NTL Incorporated (and NTL (Delaware), Inc. co-obligor) are in default
in respect of $2.5 million of interest payments in respect of its
5-3/4% notes due 2011, including interest accrued on such missed
interest payment up to May 8, 2002, and                                                          
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | NTL Communications Corp. is in default in respect of an aggregate of
$92.9 million of interest payments in respect of its 9-1/2% notes due
2008, 11-1/2% notes due 2008, 11-7/8% notes due 2010 and 12-3/4% notes
due 2005, including interest accrued on such missed interest payments
up to May 8, 2002.

Principal

As a consequence of the Chapter 11 filings on May 8, 2002, all amounts
outstanding under the indentures governing the high yield and convertible debt
of the entities having commenced Chapter 11 cases automatically became
immediately due and payable. However, the automatic stay of Section 362 of the
U.S. Bankruptcy Code serves to prevent the holders of such debt from seeking to
enforce their collection rights under the indentures, except within the context
of the Chapter 11 cases, and even then only with the prior approval of the
bankruptcy court. As a result of the default and acceleration resulting from
the Chapter 11 filing, as of September 30, 2002:



| |  | NTL Incorporated (and NTL (Delaware), Inc. co-obligor) are in default in respect of an aggregate of $100.0 million in
principal amount of debt;
|- |  | -----------------------------------------------------------------------------------------------------------------------------------------------
| 
| |  | NTL (Delaware), Inc. is in default in respect of an aggregate of $1,200.0 million in principal amount of debt;                                 
| 
| |  | NTL Communications Corp. is in default in respect of an aggregate of $8,272.7 million in principal amount of debt; and                         
| 
| |  | Diamond Cable Communications and Diamond Holdings are in default in respect of an aggregate of $1,558.5 million in
principal amount of debt.   

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

Failure to Pay Dividends on Preferred Stock

On February 4, 2002, NTL Incorporated announced that it would not declare or
pay dividends on its 13% Senior Redeemable Exchangeable Preferred Stock. NTL
Incorporated did not make the dividend payments due on February 15, 2002 of
$6.0 million, on May 15, 2002 of $6.2 million and on August 15, 2002 of $6.4
million in respect of the 13% preferred stock. In addition, NTL Incorporated
did not pay dividends on its 5% cumulative participating convertible preferred
stock held by France Telecom on December 31, 2001 of $37.0 million, on March
31, 2002 of $37.5 million, on June 30, 2002 of $38.0 million and September 30,
2002 of $38.4 million, or on its cumulative convertible preferred stock held by
France Telecom and a group of commercial banks on December 31, 2001 of $24.9
million, March 26, 2002 of $24.1 million, on June 30, 2002 of $42.1 million and
on September 30, 2002 of $41.2 million. Historically, payment of dividends has
been made in additional shares of preferred stock in the case of the 13%
preferred stock, the 5% cumulative participating preferred stock and the
cumulative convertible preferred stock. NTL Incorporated did not pay these
dividends due to a lack of available surplus under Delaware law. Under Delaware
law, NTL Incorporated cannot declare or pay dividends on or redeem its capital
stock, including its preferred stock, unless it has available surplus. As of
August 14, 2002, the aggregate amount of unpaid dividends of NTL Incorporated
with respect to the above mentioned series of preferred stock was $215.8
million.




ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K



|(a) |  | Exhibits.
|--- |  | ---------



| | 99. |  | 1 Certification of CEO and CFO pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------



|(b) |  | Reports on Form 8-K.                                                                                     
|--- |  | ---------------------------------------------------------------------------------------------------------
|   
|    |  | During the quarter ended September 30, 2002, the Company filed the
following Current Reports on Form 8-K:



| |  |  | Report dated July 5, 2002, reporting under Item 5, Other
Events, that NTL announced that it had obtained final approval from
the court in which its United States Chapter 11 cases are pending for
the previously announced Debtor in Possession financing.                                     
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | Report dated September 6, 2002, reporting under Item 3,
Bankruptcy and Receivership, that the Bankruptcy Court entered an
order confirming the Second Amended Joint Reorganization Plan of NTL
Incorporated and Certain Subsidiaries, filed on July 15, 2002 (as
modified on September 5, 2002).



| |  | No financial statements were filed with these reports.
| |  | ------------------------------------------------------

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                        |  |                  |  |                                                                           
|----------------------- |  | ---------------- |  | --------------------------------------------------------------------------
|                        |  | NTL INCORPORATED
|                       
|                       
|                       
|                       
|                        |  |                  |  |                                                                           
|                       
|                       
|                       
|                       
|Date: November 13, 2002 |  | By:              |  | /s/ Barclay Knapp                                                         
|                        |  |                  |  |                                                                           
|                        |  |                  |  | Barclay Knapp
President and Chief Executive
Officer                       
|                       
|                       
|                       
|                       
|                        |  |                  |  |                                                                           
|                       
|                       
|                       
|                       
|                        |  |                  |  |                                                                           
|                       
|                       
|                       
|                       
|Date: November 13, 2002 |  | By:              |  | /s/ Gregg N. Gorelick                                                     
|                        |  |                  |  |                                                                           
|                        |  |                  |  | Gregg N. Gorelick
Vice President-Controller
(Principal Accounting Officer)

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NTL Incorporated (Debtor-in-Possession) and Subsidiaries

FORM OF CERTIFICATION FOR
QUARTERLY REPORTS ON FORM 10-Q

I, Barclay Knapp, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of
NTL Incorporated;                                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
|  
|3. |  | Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:                                                                                                     



| | a) |  | Designed such disclosure controls and
procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the
registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of registrants
board of directors (or persons performing the equivalent
function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the
design or operation of internal controls which could
adversely affect the registrants ability to record,
process, summarize and report financial data and have
identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrants internal controls;
and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                      
|----------------------- |  | -------------------------------------
|Date: November 13, 2002 |  | /s/ J. Barclay Knapp                 
|                        |  |                                      
|                        |  | Barclay Knapp
Chief Executive Officer

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##### Table of Contents



NTL Incorporated (Debtor-in-Possession) and Subsidiaries

FORM OF CERTIFICATION FOR
QUARTERLY REPORTS ON FORM 10-Q

I, John F. Gregg, certify that:



|1. |  | I have reviewed this quarterly report on Form 10-Q of
NTL Incorporated;                                                                                                                                                                                                                                                       
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|2. |  | Based on my knowledge, this quarterly report does not
contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not
misleading with respect to the period covered by this quarterly
report;
|  
|3. |  | Based on my knowledge, the financial statements, and
other financial information included in this quarterly report,
fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of,
and for, the periods presented in this quarterly report;                   
|  
|4. |  | The registrants other certifying officers and I are
responsible for establishing and maintaining disclosure controls
and procedures (as defined in Exchange Act Rules 13a-14 and
15d-14) for the registrant and we have:                                                                                                     



| | a) |  | Designed such disclosure controls and
procedures to ensure that material information relating to
the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities,
particularly during the period in which this quarterly
report is being prepared;
| | -- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Evaluated the effectiveness of the
registrants disclosure controls and procedures as of a
date within 90 days prior to the filing date of this
quarterly report (the Evaluation Date); and                                                                                                  
|
| | c) |  | Presented in this quarterly report our
conclusions about the effectiveness of the disclosure
controls and procedures based on our evaluation as of the
Evaluation Date;                                                                                                                        



|5. |  | The registrants other certifying officers and I have
disclosed, based on our most recent evaluation, to the
registrants auditors and the audit committee of registrants
board of directors (or persons performing the equivalent
function):
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | a) |  | All significant deficiencies in the
design or operation of internal controls which could
adversely affect the registrants ability to record,
process, summarize and report financial data and have
identified for the registrants auditors any material
weaknesses in internal controls; and
| | -- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) |  | Any fraud, whether or not material, that
involves management or other employees who have a
significant role in the registrants internal controls;
and                                                                                                                                        



|6. |  | The registrants other certifying officers and I have
indicated in this quarterly report whether or not there were
significant changes in internal controls or in other factors
that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                        |  |                                      
|----------------------- |  | -------------------------------------
|Date: November 13, 2002 |  | /s/ John F. Gregg                    
|                        |  |                                      
|                        |  | John F. Gregg
Chief Financial Officer

82